The company’s revenues decreased by 47.3% during the first 9 months of 2020 compared to the same period in 2019, to record 13.8 billion riyals ($ 3.7 billion), compared to 26.2 billion riyals ($ 7 billion) during the aforementioned period last year, according to the statement.
(Depending on its location)
The company was established under an agreement signed in 2005 between Saudi Aramco and Sumitomo Chemical Company of Japan, to build an integrated refining and petrochemical complex and modernize the Aramco refinery in Rabigh, which is located in Makkah. Aramco and Sumitomo each own 37.5% of the company.
Causes of losses
(According to the statement)
The company attributed the losses realized within 9 months to the complete cessation of work in the company’s industrial complex to carry out comprehensive periodic maintenance for a period of 60 days.
The company said that the losses also came due to a decrease in the profit margin of products due to difficult market conditions and the Coronavirus pandemic, which led to a decrease in demand for products and thus lower prices further.
Last April, oil prices fell below zero a barrel for the first time in history, due to the repercussions of the global shutdown resulting from the Corona virus.
The company said that, as of September 30, the accumulated losses amounted to 2.8 billion riyals ($ 747 million), representing 32.05% of the company’s capital of 8.76 billion riyals ($ 2.3 billion).
Accumulated losses are losses that a company has recorded over more than one financial period.
Reasons for high accumulated losses
The company, in its statement today, attributed the increase in the accumulated losses to four main reasons:
1- Global economic recession
2- Market ambiguity
3- The Coronavirus pandemic continues
4- Completely stopping work in the company’s industrial complex for a period of 60 days to carry out comprehensive periodic maintenance
(Prepared by: Maryam Abdel-Ghani, Maryam previously worked for several media organizations, including the Egyptian Voices website of the Thomson Reuters Foundation and Al-Ghad Al-Arabi TV)
(Edited by Yasmine Saleh to communicate: [email protected])
Zawya Arabi covers economic news and analysis on the Middle East and the Arabian Gulf from Sunday to Thursday and uses simple Arabic.
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