Sahara International Petrochemical Co. (Sipchem) announces its Annual Financial Results for the Period Ending on 2020-12-31
Thursday, March 11, 2021
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ELEMENT LIST CURRENT YEAR PREVIOUS YEAR %CHANGE
Sales/Revenue 5,323 5,439.7 -2.145
Gross Profit (Loss) 1,172.9 1,635.2 -28.271
Operational Profit (Loss) 359.6 906.3 -60.322
Net Profit (Loss) after Zakat and Tax 175.9 299.5 -41.268
Total Comprehensive Income 108.4 255.5 -57.573
Total Share Holders Equity (after Deducting Minority Equity) 12,986.7 13,342.2 -2.664
Profit (Loss) per Share 0.24 0.52
All figures are in (Millions) Saudi Arabia, Riyals
ELEMENT LIST EXPLANATION
The reason of the increase (decrease) in the net profit during the current year compared to the last year is Reason for the decrease in net profit of Sipchem for the current year as compared to the previous year is lower Sales Revenue as a result of lower selling prices for most of Sipchem’s products and lower production in Polypropylene plant due to unplanned shutdown and turnaround maintenance as previously announced on Tadawul.

 

 

Further, Sipchem recorded an impairment loss of SR 280 million in 2020 financial results which related to International Diol Company cash generating unit (SR 100 million) and EVA Films plant within Saudi Specialized Products Company (SR 180 million).

 

This decrease is despite relatively lower average price of certain feedstocks and despite profit contribution from Sahara Petrochemicals Company for 12 months in the current year whereas previous year only included Sahara Petrochemicals Company profit contribution for 7 months.

Statement of the type of external auditor's report Unmodified opinion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion Certain comparative figures have been reclassified to comply with the current period presentation of the financial statements
Reclassification of Comparison Items None
Additional Information Economic environment and its effects on business:

 

On 11th March 2020, the World Health Organization declared COVID-19 coronavirus outbreak to be a pandemic.

 

Consequently, asset prices became more volatile and with a marked decline in long-term interest rates in developed economies. These circumstances impacted FY2020 and resulted in a decrease in sales, net income, EBIT, free cash flow and other financial metrics when compared with the corresponding period in 2019. However, Sipchem has implemented active prevention programs at its sites and has contingency plans in order to minimize the risks related to COVID-19 and to continue business operations, ensuring the health and safety of its employees, customers, contractors and wider community.

 

Sipchem has also taken measures to optimize spending, which have resulted in reducing operational and capital expenditures during the period. Additionally, the Group has secured additional credit facilities to ensure sufficient funds remain available to meet forecasted cash flow requirements and limit any potential financial exposure. Moreover, the management has considered potential impacts of the current economic uncertainties and volatility in determining the carrying amounts of the Group’s financial and non-financial assets. These are based on management's best estimates based on observable information at the year end. Also, the changes in geographical distribution of the Sipchem’s customer base, compared to previous period have assisted the management to minimize demand and recoverability challenges from Covid-19. Sipchem also continues to monitor long term supplier contracts in order to ensure minimal disruption in operations and timely delivery of its products.

 

Profit Per Share:

The profit per share has been calculated for the period ending 31 December 2020 on the basis of weighted average number of shares (728,162,000) in issue which include adjustment for Treasury shares repurchased by Sipchem in line with the approval of the Extraordinary General Assembly held on 29/4/2020 as announced in Tadawul on 30/4/2020.