Advanced Petrochemicals’ chairman of the board, Khalifa Al-Mulhim, said the company’s delay in disclosing its third quarter results occurred because its subsidiary “SK Advanced” was late in preparing the results.
Al-Mulhim added in an interview with Al-Arabiya that SK Advanced is suffering in terms of polypropylene production, which is seeing a rise in prices.
He said the challenges “SK Advanced” faces are the same challenges “Advanced” faces. And all global petrochemicals.
Al-Mulhim indicated that in recent years there have been profits from investing in SK Advanced due to the difference between raw material prices and product prices.
He stressed that there are no signs of improvement in the short term in light of high inflation rates, rising interest rates, China’s “zero Covid” policy and the expected economic recession.
The Chairman of the Board said “Advanced” will work to reduce expenses in its subsidiary in South Korea, noting that the factory will be shut down to avoid losses and negative flows, as happened last July when the factory was shut down for a month and a half.
He explained that commodity prices have risen 6% year-on-year in the third quarter of this year, while the increases have reached 18% since the beginning of the year so far.
He added that “the advanced results also show a 23% decrease in sales prices, which puts pressure on the final product.”
Polypropylene prices were expected to rise again in the winter, relying on it for heating.
He predicted that commodity prices will decline in the second quarter of next year and that there could be an improvement in selling prices if the performance of global economies improves.
He said there has been a significant improvement in supply chains and logistics services, as freight rates have fallen by 50% since the beginning of the year until now.
He continued: “We plan to increase sales to compensate for some losses and reduce fixed expenses, which we reduced by 20% in the first nine months of the year, which helps to cope with pressures from global markets.”
Regarding the high cost of SIBOR which reaches 6%, Al-Mulhim said that so far there is no significant impact on the budget of “Advanced”.
