|15 January, 2017

Saudi's SAFCO reports 25% drop in profits

Company blames lower product prices and higher costs

Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia June 29, 2016.

Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia June 29, 2016.

REUTERS/Faisal Al Nasser


DUBAI, Jan 15 (Reuters) - Saudi Arabia Fertilizers Co (SAFCO), a unit of Saudi Basic Industries Corp (SABIC), reported on Sunday a 24.85 percent drop in its fourth-quarter net profits, to 284.5 million Saudi riyals ($75.85 million), blaming lower product prices and higher costs.

The firm, which reported a fall in profits in 13 of the preceding 14 quarters according to Reuters data, was forecast by five analysts on average to make a profit of 273.76 million riyals in the three months ended Dec. 31.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.

Like many petrochemical firms in the kingdom, SAFCO's earnings have been hit hard by falling oil prices, which have dragged down product prices and reduced the benefits to their margin of subsidised energy and feedstock costs.

SAFCO is also a big producer of ammonia and urea and, since mid-2013, manufacturers worldwide have voiced increasing concerns over the continued fall in urea prices due to China's increased output. ($1 = 3.7506 riyals)

(Reporting by Davide Barbuscia; Editing by Greg Mahlich) ((Davide.Barbuscia@thomsonreuters.com;))

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