Advanced posts record Q2 2021 profit on higher product prices, expects continued demand growth in Q3: Chairman

Khalifa Al Mulhem, Chairman of Advanced Petrochemical Co.

Advanced Petrochemical Co.’s Q2 2021 record profits were driven by higher product selling prices, resumption of operations after scheduled maintenance, and an increase in the company’s profit share from SK Advanced Co. Ltd. on higher polypropylene prices, Chairman Khalifa Al-Mulhem told Argaam in a telephone interview.

Better oil prices and a global economic recovery reflected positively on product prices, as feedstock costs reached up to $450 per ton in the second quarter of the year.

On the other hand, product prices rose in value terms, as feedstock costs saw a higher percentage increase, Al-Mulhem added.

The chairman also expected improved demand for petrochemicals to continue in the third quarter of the year amid better global economic conditions and higher prices. He also anticipated Advanced to report positive performance in the third quarter, as prices maintain solid levels.

When asked about the commercial operation of the polypropylene plant in South Korea, Al-Mulhem said the plant’s contribution to Q2 earnings was marginal, as production has just commenced.

The plant needs stability for several months to support profit, he noted, expecting the relevant financial impact in the third and fourth quarters of the year.

Advanced reported an estimated net profit after Zakat and tax of SAR 436 million for the first half of 2021, a 68% rise from SAR 259 million in the year-earlier period, Argaam reported.