KARACHI (ICIS)--Saudi-based Rabigh Refining and Petrochemical Co (Petro Rabigh) swung to a first-quarter net profit on stable operations and higher sales volume but the earning was 66. 7 % below from the previous quarter earnings, the company said late on Wednesday.
The joint venture of state-owned oil company Saudi Aramco and Japan's Sumitomo Chemicals posted a net profit of Saudi riyal (SR) 413.1m ($110.2 million) in the three months to end-March against a net loss of SR658.1m in the same period a year earlier, it said in a statement to the Saudi bourse.
“The reason for net profit was due to stable operations in 1Q 2014, accordingly production and sales volume were increased. In addition, there was a positive impact of the revised commercial arrangements with founding shareholders,” Petro Rabigh said.
In December last Petro Rabigh’s parent companies had agreed to cut international marketing fees by a third, and they also cancelled commissions to market petroleum products in the domestic market.
The action is expected to raise Petro Rabigh’s revenue by almost SR1bn ($267m) in 2014.
It reported operating profit of SR416.3 m against a loss of SR628.5 m in the first quarter of 2013, while gross profit remained at SR672.1 m against a loss of SR449.2 m in the previous year.
The company said the drop in net profit on quarter-to-quarter basis was due to impact of commercial arrangements with founding shareholders and recognition of utilities provider settlement payment in end 2013.
In the previous quarter the company booked SR750m one-off settlement payment by Rabigh Arabian Water & Electricity Co (RAWEC), which is the utilities provider at Petro Rabigh’s petrochemical complex and that was hit by two separate incidents of power outage in 2013.