Petro Rabigh Loss Widens as Refinery Maintenance Cuts Output
(Updates with closing share price in first paragraph.)
Oct. 19 (Bloomberg) -- Rabigh Refining & Petrochemicals Co. tumbled 10 percent on the Saudi stock exchange after the 400,000 barrel-a-day fuel-processing plant reported a wider-than- expected third-quarter loss after maintenance cut output.
The net loss increased to 281 million riyals ($75 million) from 237 million riyals for the same three months last year, the company known as Petro Rabigh said today in a statement to the Saudi bourse. The oil and petrochemicals refiner said it was profitable in September after operations resumed Aug. 15.
Petro Rabigh shares plunged 2.55 riyals to 22.95 riyals at the close of trading in Riyadh. The market expected the company to return to profit, said John Tottie, an analyst at HSBC in Riyadh, who had targeted net income of 354 million riyals.
“We had forecast -- and the market had expected -- a positive number in the third quarter, given high chemical prices and relatively healthy refining margins in Asia, which is a key market for Rabigh’s output,” he said in an e-mail.
“After almost two years of largely disappointing operating performance, it stands to reason that some skepticism is required on earnings from Rabigh going forward,” said Tottie, who has a “Neutral” rating on the stock.
PetroRabigh aims to sell new stock to help fund expansion, and it plans to decide this year whether to put the growth program into effect, Chief Executive Officer Ziad al-Labban said Oct. 2. The company’s plant, on Saudi Arabia’s Red Sea coast, expects to double petrochemicals capacity to 3.7 million metric tons a year if it completes the planned expansion.
PetroRabigh is a joint venture between state-run Saudi Arabian Oil Co. and Sumitomo Chemical Co. of Japan, each of which owns 37.5 percent. The facility produces about 1.3 million tons of ethylene and additional amounts of related products.
Earnings per share during the first nine months of the year was 0.02 riyal, down from 0.18 riyal during the same period last year, the company said.
--With assistance from Inal Ersan and Zahra Hankir in Dubai. Editors: Rob Verdonck, John Buckley
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