Advanced CEO: Petrochemical sector challenges expected to persist in Q1

Mamdouh Al Amri, CEO of Advanced Petrochemical Co.

Mamdouh Al Amri, CEO of Advanced Petrochemical Co., expected challenges in the petrochemical sector to continue during Q1 2026, amid pressure on profit margins due to a 10% rise in propane prices and stable selling prices. However, improved prices in March are expected to support margin recovery in Q2.

In an interview with Argaam, Al-Omari said Q4 2025 was difficult for the sector because of lower selling prices, which pressured margins by around 10% (about $30 per ton). Nevertheless, higher production volumes and cost reductions helped the company return to profitability compared with the same period in 2024.

He noted that full depreciation and financing expenses were recorded in Q4, compared with about 85% in Q3 following the startup of the polypropylene production lines in mid-July.

Al Amri added that revenues increased by SAR 590 million year-on-year, with volumes contributing a positive SAR 760 million impact, while prices had a negative impact of SAR 170 million.

He also pointed out that no losses were recorded from the company’s share of investment in SK Advanced in Q4 2025, compared with losses of SAR 37 million in the same period of 2024, after recognizing an impairment provision of SAR 212 million last year.

The polyolefins project exceeded its designed production capacity in Q4 and maintained stable operations, with plans to expand into higher-margin applications in the second half of 2026.

Al Amri further noted an improvement in operating cash flows, supporting debt reduction and lower financing costs in the coming periods.

According to Argaam data, Advanced reported a profit of SAR 226 million for 2025, compared with losses of SAR 259 million in 2024. Q4 profit reached SAR 873,000.