Yansab's first full quarter generates net profit of $134m

14 July 2010 12:23  [Source: ICIS news]

LONDON (ICIS news)--Saudi Arabia’s Yanbu National Petrochemical Company (Yansab) has reported a net profit of Saudi riyal (SR) 502.4m ($134.0m) for the second quarter, its first full quarter of commercial operation, the company said on Wednesday.

The result compares with a net loss of SR6.7m in the second quarter of 2009 and a net profit of SR259.4m in the first quarter of 2010.

Operating profits for the quarter were SR596.0m, it said

The net results were 9% below consensus and 13% below its forecast, Credit Suisse said in a note to clients.

“We had always maintained that the market was attributing optimistic margins for Yansab, without discounting adequately for the mixed feed nature of the crackers and that there was significant downside risk to our optimistic scenario,” Credit Suisse said.  The first full quarter of plant operations provided visibility to the earnings potential of the company, it added.

Operating profits for the quarter were 25% below its forecast.

Commercial operations commenced on 1 March 2010, Yansab said. The Yansab cracker started up in September 2009.

Yansab is a joint-stock company 51% owned by SABIC. It operates a 1.3m tonne/year cracker in Yanbu, Saudi Arabia, and downstream ethylene oxide, ethylene glycol, polyethylene, polypropylene and aromatics units.

($1 = SR3.75)

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By: Nigel Davis
+44 20 8652 3214



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