National Industrialization Co.’s (Tasnee) positive results in Q1 2017 were boosted by improved selling prices and an increase in other income, vice president Fawaz Mohamed Al Fawaz told Argaam in an interview.
Tasnee reported a net profit of SAR 103.3 million in Q1 2017, versus net losses of nearly the same amount in the same period last year.
Productivity and sales volumes were boosted by the petrochemical firm’s improved operating performance and restructuring program, which is almost complete, he added.
Tasnee’s profit missed consensus estimates by 29 percent as some analysts drew comparisons between the company and other peer firms, he added, noting that financial results were impacted by the prices of some materials, amid the company’s efforts to increase goods sold and cut costs.
The transition to International Financial Reporting Standards (IFRS) also weighed on end-of-service benefits, plants’ consumption, and the consolidation of financial statements, Al Fawaz said.
Meanwhile, the sale of Tasnee’s 79 percent-owned titanium dioxide business (Cristal) to Tronox for $1.67 billion in cash and 7.6 million in shares will help the company restructure and reduce debt, focus more on petrochemicals operations, and explore new investment opportunities, he added.
The deal, inked in February this year, is expected to be completed by year-end or early 2018. It will be financed by proceeds from selling Tronox’s alkali business and selected other non-core assets if appropriate, and cash on hand.
Going forward, current market conditions and higher demand are expected to reflect positively on performance, Al Fawaz noted.
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