15 April 2014 17:25 [Source: ICIS news]
DUBAI (ICIS)--Saudi Arabia's Sahara Petrochemical posted a 20.3% decline in first-quarter net profit on Tuesday as a planned shutdown of its plant during the quarter contributed to lower sales.
The firm, currently in talks with Sipchem over a possible merger, made a profit of 99.9m Saudi riyal (SR) ($26.6 m) in the opening three months of 2014, compared with SR125.4m in the same period last year, Sahara said in a bourse filing.
“Profit margins dropped as sales quantities fell because of the planned shutdown of ALWAHA plant, something the company had already announced at the time of the shutdown,” it said in a brief statement.
The firm’s first-quarter gross profit fell by 26.23% year on year to SR57.1m while operating profit fell 58% year on year to SR 17.9 m.
Sahara said that the company had also incurred non-recurring costs on studies related to the proposed merger with Sipchem, which further reduced company profit by approximately SR8.3m.
Last July, Sipchem and Sahara entered into a non-binding agreement to conduct a feasibility study on the proposed merger. Later in December the two companies signed a memorandum of understanding to consider the feasibility of the deal.
Sahara makes propylene, polypropylene, ethylene and polyethylene.
($1 = SR3.75)
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