Riyadh – Mubasher: Al Jazira Capital predicted the net income of the Saudi petrochemical sector to improve by 9% during the third quarter of 2019, compared to the second quarter of the same year.

The research company ascribed the increase in profits to the expected growing gross margin, thanks to a decrease of 25% in feedstock prices, according to a recent press release.

Revenues are expected to remain down because of lower prices in several product prices as well as the feedstock disruption after Abqaiq–Khurais attacks (3% - 4% impact on the top line).

The overall year-on-year performance is projected to show an approximate drop of 56% due to weak product prices and product spreads.

Additionally, Brent crude price slipped to $55.8 per barrel (pb) in September, posting an 11.5% quarter-on-quarter drop to average at $62.1 pb, owing to trade war concerns.

Al Jazira Capital predicts net profits of Saudi Basic Industries Corp. (SABIC) to soar to SAR 2.357 billion in Q3-19 from SAR 2.115 billion in Q2-19, thanks to ‘’the improved gross margin and non-recurring impacts from [SABIC’s] associate Clarinet Co. during last quarter.’’

Yanbu National Petrochemical Company’s (Yansab) net profits are forecast to increase to SAR 328.6 million in Q3-19, posting a 3.9% quarter-on-quarter (QoQ) rise, mainly due to the expected improvement in the gross margin.

Moreover, the net profits of the Saudi Arabian Fertilizer Company (SAFCO) are likely to reach SAR 443.1 million in Q3 this year, recording a 16.5% QoQ surge on the back of the improved volumetric sales after Q1-19 and Q2-19 shutdowns at SAFCO-3 for 117 days.

Sahara International Petrochemical Co’s (Sipchem) “net profit is expected to fall in Q3-19 to SAR 199.9 million from SAR 210.9 million in the previous quarter, due to weak product prices and the impact of turnaround maintenance for three plants during Q3-19.”