RIYADH: The company, an affiliate of Saudi Basic Industries Corp (Sabic), made a net loss of SR216.3 million ($57.7 million) in the three months to March 31, it said in a bourse statement. This compares with a loss of SR591.6 million ($157.7 million) in the same period of 2015.
The average estimate of three analysts polled by Reuters was for a quarterly loss of SR373.8 million ($99.6 million). The company cited an increase in production and sales volumes, a decrease in the costs of feedstock and other raw materials, as well as lower marketing fees for the reduction in losses.
Like many petrochemical firms in the kingdom, Kayan’s earnings have been hit hard by falling product prices as they are closely tied to the price of oil: it had reported losses in the preceding four quarters. Kayan’s plant that produces ethylene glycol and oxide ethylene was offline throughout March for scheduled maintenance, with the move also halting production of polycarbonate, ethoxylates and amines.
The financial impact of the shutdown was estimated to be SR96 million ($25.6 million), which would be reflected in its first- and second-quarter results. Kayan was among a few companies that received a grace period for receiving feedstock at subsidised prices. This will end in the second quarter of 2017, at which point prices will gradually rise until the fourth quarter of 2017.
