Higher margins and one off income helped Saudi based Rabigh Refining and Petrochemical Co (PetroRabigh) post its first quarterly net profit after starting operations at its $10.1 billion complex.
But first quarter operating results at the joint venture of Saudi Aramco and Japan’s Sumitomo Chemical remained in the red after it inaugurated the giant plant in November and commissioned all the production units in December.
PetroRabigh swung to a net profit of $72.4 million in the three months to end March from a net loss of $7.6 million a year earlier, PetroRabigh said.
Without elaborating, PetroRabigh said: “The rise in net earnings stemmed from … improvement in the profit margin of both the refining and petrochemical sectors and to the stabilisation of the company’s production operations and to non recurring profits.”
The company made a net operating loss of $13.2 million in the first quarter, wider than the $10.3 million loss a year earlier but narrower than a $49.1 million operating loss it made during the fourth quarter of 2009.
State controlled Aramco and Sumitomo Chemical each have 37.5 percent stakes in the joint venture with the rest publicly held.
Chief executive Ziad Al Labban told Reuters in November that the company could make a profit in the fourth quarter of 2009 if refining margins improved fast enough.
A month later, he said margins had not yet started to improve unlike prices of petrochemicals.
The global crisis has weighed on demand for petrochemical products, leading global players to post lower margins.
PetroRabigh, which caters mainly to the Saudi market and Europe and North Africa, can process 400,000 barrels of crude per day, accounting for about 19 percent of Saudi Arabia’s total refining capacity.
It can produce an annual 18 million tonnes of refined products and 2.4 million tonnes of petrochemical products. (Reuters)
