By Staff writer
Industrial companies announces estimates of impact on earnings of energy price rises in 2016 state budget
Some of Saudi Arabia's biggest industrial companies have announced estimates of the impact on their earnings of fuel, electricity and natural gas feedstock price hikes in the 2016 state budget.
The likes of Saudi Basic Industries Corp (SABIC), National Industrialization Co (Tasnee), Rabigh Refining and Petrochemical Co (PetroRabigh), Yanbu National Petrochemical Co (Yansab) have said that they will see added costs of hundreds of millions of riyals as a result of the budget.
Tasnee said that changes to energy and gas feedstock prices announced by the government earlier this week would hurt its 2016 results by around 190 million riyals ($50.7 million).
The firm said it would continue to cut costs and improve operational efficiency. The diversified industrial company has interests in petrochemicals, metals and chemicals and is one of the world's largest producers of titanium dioxide through its Cristal subsidiary.
PetroRabigh said it expects a negative financial impact of 300 million riyals ($80 million) from the energy price hikes announced in the 2016 government budget.
The firm, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, said further developments would be announced at a later date.
Yansab expects fuel and electricity price hikes announced in the 2016 government budget to increase its production costs by 6.5 percent next year.
The impact will be reflected on the company's profitability starting from the first quarter of 2016, it said, adding that it was working on reducing the impact by increasing plants' efficiency and cutting other costs.
SABIC said that changes to energy and gas feedstock prices announced by the government earlier this week would increase its total annual costs before minority interests by around 5 percent next year.
The company, one of the world's largest petrochemicals firms, said in the bourse filing that the impact of the changes would be felt from the first quarter of 2016.
Saudi Cement Co said in a statement that it expects the fuel and electricity price hikes to increase its production costs by 68 million riyals ($18.1 million) next year while Saudi Arabia Fertilisers Co (SAFCO) said its production costs would likely rise by 8 percent next year.
* With Reuters