Saudi Arabia Fertilizers Co (SAFCO) posted a 6.7% drop in its second-quarter net profit on Sunday, although the earnings still beat analysts’ forecasts.

SAFCO, a unit of Saudi Basic Industries Corp (SABIC), one of the world’s biggest petrochemical companies, said it made 596 million riyals ($158.9 million) in the three months to June 30, compared to 639 million riyals a year ago.

A group of seven analysts polled by Reuters had, on average, forecast that SAFCO would make a quarterly profit of 518.4 million riyals.

The company attributed the drop in profit to a decrease in selling prices for the company’s products and the sale of lower quantities of ammonia. Although, sale quantities of urea increased, which reduced the impact of falling prices, it said.

SAFCO, a big producer of ammonia and urea, is dependent on global demand and prices. Since mid-2013, global players have voiced increasing concerns over the continued fall of urea prices due to China’s ramp up in output.

The firm has been posting decreasing profits. Its first-quarter profit tumbled 30% from a year ago, missing analysts’ forecasts due to lower sales and prices of its products.

It trimmed its dividend payout for the first half of the year, saying earlier this month it would pay 3 riyals per share. This compares to 4 riyals per share in the corresponding period of 2014.

SAFCO said in May the start-up of a new urea plant had been pushed back further and was now expected by the end of June but the delay would not increase the cost of the plant.

The plant, which has an annual production capacity of 1.1 million tonnes of urea, was originally scheduled to start up in the third quarter of 2014 but was delayed by construction work falling behind the original timetable.

Source: Reuters