RIYADH: National Industrialization Co.’s profit drop came on the back of rising feedstock costs and lower gains from associates, CEO Mutlaq Al-Morished told Argaam.
Feedstock costs were up by a staggering 45 percent year-on-year, according to the executive.
Tasnee, as the company is known, had earlier reported a decline in profit during the first quarter to SR309 million ($82 million) from SR328 million a year earlier.
“A profit drop of 6 percent is not huge, compared to global markets. Petrochemical prices in the first quarter were almost the same as the fourth quarter of 2021, while profit was hit despite higher sales,” said Al-Morished.
He added that supply chain issues caused a delay in March shipments, with higher shipment rates also weighing on profitability.
Al-Morished concluded that global petrochemical prices are expected to remain unchanged in the ongoing quarter, noting that demand is still strong.