Ali Al-Asiri, CEO of Methanol Chemicals Co. (Chemanol)
Methanol Chemicals Co. (Chemanol) posted historical financial results for the third quarter of 2021, Al-Arabiya TV channel reported, citing CEO Ali Al-Asiri.
He expects the company to report better results in the future. "Were it not for global supply issues, Q3 2021 figures would be much better."
The growth in average selling prices was 'excellent', but varied for the company's 15 products, as it hit 100% for some products and ranged between 70-80% for the others. Generally, high prices had a positive impact on the quarterly results.
The chemical producer faced a shortage of some imported feedstocks and basic materials, in addition to the difficulty of exporting some products, especially to Africa and Europe, due to the current scarcity of commercial ships.
The top executive further said shipping costs doubled due to lack of alternatives, noting that this crisis is expected to end at the beginning of Q2 2022.
High production costs were unusual due to the high prices of some feedstocks, which ranged between 100-200% for some products, which affected operating costs, but they were offset by profits and high selling prices.
Demand was high for several reasons, most important of which was the global economic recovery from the pandemic, especially East Asia and some markets that were facing problems and Chemanol was their alternative.
Accordingly, the Tadawul-listed firm acquired new market shares in some countries, including China, which restricted methanol production from coal. This led to an increase in sales of DMF, which is one of the most expensive products sold by Chemanol. This contributed significantly to the company's profits during the third quarter.
Commenting on the impact of the real estate crisis faced by China on the prices of Chemanol's products, Al-Asiri said, "I don’t expect it to have an impact because China is not among our major markets, but rather a strong competitor for us in the East Asian markets. Contrarily, the crisis led to an increase in prices and demand for the products."
Chemanol turned to an estimated net profit after Zakat and tax of SAR 164.2 million for the first nine months of 2021, against a net loss of SAR 262.3 million a year earlier.
In Q3 2021, Chemanol swung to a net profit of SAR 74.1 million against a net loss of SAR 202.4 million in the year-ago period, according to data compiled by Argaam.
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