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Advanced Petrochemical Co. CEO Mamdouh Al-Amri stated that the company expects stable profit margins in Q2 2024, driven by lower propane prices and freight costs. Despite geopolitical uncertainties affecting the Strait of Hormuz, rerouted shipments to Yanbu and Red Sea ports—though increasing freight costs by $200 per ton—were offset by higher net selling prices. The company also announced progress in producing higher-value copolymer products, which are expected to boost margins by $40 per ton starting in 2026. Additionally, the Advanced Polyolefins plant reached full capacity by December 2025, with potential to enhance profitability if current production levels persist.
For markets, the news highlights resilience in Saudi industrial sectors amid supply chain disruptions. Traders should monitor geopolitical risks in the Strait of Hormuz and the company’s product diversification efforts, which could influence long-term profitability. The stability of propane prices and freight cost management are critical factors for the company’s margins.
Looking ahead, investors should track the company’s progress in European market expansion for its new products and the impact of the 2026 copolymer launch. The maintenance-related one-time expense of SAR 20 million and reduced future maintenance days by 50% also warrant attention for operational efficiency improvements.
