Saudi Kayan Posts $116.3m Losses for First Time

Saudi Kayan Posts $116.3m Losses for First Time

Saudi Kayan Petrochemical Co. reported a net loss of $166.3m in the Q4 of 2015, the first major petrochemicals firm in the kingdom to report its earnings, according to the Business Recorder. Reuters said this was the largest loss Kayan had suffered since it was first listed in 2007, with its share prices falling 6.4% after it had released the bad news in a stock exchange statement.

Kayan chalked this loss down to a drop in the average selling prices of most petrochemicals products, in addition to a problem with its spare parts inventory. Maintenance work at some of its plants had been rescheduled, causing production delays. The company further explained that the drop in its oil feedstock costs and an increase in overall sales volume, along with a drop in marketing fees from its parent company SABIC, were not enough to counteract the losses. The company did not provide sales figures, however.

Kayan was one of a few Saudi companies that had been granted a grace period stretching to the Q2 of 2017 for receiving feedstock at subsidized prices, according to an earlier report by Reuters. This was following the government announcement that energy subsidies would be phased out to reduce the budget deficit. In the meantime, the company will only face gradually rising production costs. Kayan’s feedstock also includes ethane, butane and methane.

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