Petro Rabigh dropped as much as 10 per cent yesterday after the petrochemical joint venture unit of Saudi Aramco said third quarter loss widened to 281 million riyals.
Investors shaken by Petro Rabigh loss
Rabigh Refining and Petrochemical shares slumped 10 per cent yesterday after disappointing third-quarter results.
The company, also known as Petro Rabigh, said net loss in the quarter widened by 18 per cent to 281 million Saudi riyals after maintenance work for the refinery and chemical units cut sales.
Petro Rabigh is a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, each of which holds a 37.5 per cent stake in the company, with the remaining 25 per cent traded on the Saudi Tadawul All-Share Index.
The shares closed down 10 per cent to 22.95 riyals yesterday. Analysts expected the oil and petrochemicals refiner to return to profit, with HSBC forecasting a profit of 354m riyals, Credit Suisse 200m riyals and Al Rajhi Bank 647m riyals.
"The result caused a shock among analysts and investors," said Hesham Tuffaha, the head of asset management at Bakheet Investment Group in Riyadh.
"Also, Petro Rabigh is a relatively new entrant to the market, competing with Saudi Basic Industries Company, which has had a long history in the petrochemical business."
Earnings per share for the first nine months of the year stood at 0.02 riyals, compared with 0.18 riyals for the same period a year ago.
Petro Rabigh's facility includes a 400,000 barrel per day refinery, a 700,000 tonne a year polypropylene plant, a 600,000 tonne a year linear low density polyethylene unit, and a 200,000 tonne a year propylene oxide facility.
The company plans to issue new shares to help to fund its expansion plan.
The Rabigh II project is due to be completed in the first quarter of 2015, but the construction award has not yet been finalised.
The expansion plan is expected to cost US$6 billion to $8bn.
Petro Rabigh reported a loss of 402m riyals in the second quarter, from a profit of 122m riyals in the same period last year.