Market improving after price hikes: Advanced CEO

The petrochemicals market is showing signs of improvement following a rise in prices in Turkey and Latin America, CEO of Advanced Petrochemical Co. Fahad Salem Al Matrafi told Argaam.

This indicates a recovery in demand and relative market stability, he added.

Profit margins remained firm and did not experience a sharp decline, despite lower selling prices on a drop in propane costs.

The CEO explained that selling prices fell by 10% year-on-year (YoY) in Q2 2025, while propane prices dropped by around 8% YoY.

Commenting on the company’s financials, Al Matrafi said the profit rise was backed by higher revenues and no losses from the SK Advanced project, which had negatively impacted H1 2024 by around SAR 67 million.

The revenue increase was supported by higher production and sales volumes, following the initial startup of one of the production lines at the new project. Al Matrafi also noted that H1 2024 included scheduled maintenance activities.

The CEO pointed out that US tariffs on Chinese propane exports impacted demand and final product prices, leading to a price drop in global markets during May.

He further noted that the new project began operations in Q2, contributing to a 20% increase in production volumes, which positively impacted sales and revenue growth, both compared to Q1 2025 and Q2 2024.

Advanced will begin calculating financing and depreciation expenses as of Q3 2025, with the actual commissioning of the new plant. However, he emphasized that the increase in production and sales will help absorb those costs gradually throughout Q3, leading up to full operational capacity.

Any reduction in interest rates in the coming period would be a positive factor, easing financing costs (FCs) and enhancing profitability, Al Matrafi highlighted.

Advanced realized a net profit of SAR 153 million for H1 2025, against a net loss of SAR 17 million during H1 2024. Q2 profit reached SAR 82 million, up 95% from Q2 2024, Argaam reported.