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00:00As we mentioned in the announcement of the company, the main effect or the basis for the company to produce this quarter is due to the reduction in the volume of sales as a result of some stoppages scheduled in some petrochemical factories in particular,
00:24in addition to the effect of lowering some prices in some other products. This is almost what affected the process of results during this quarter compared to the equivalent quarter of the previous year,
00:40knowing that the company also achieved a loss in the fourth quarter, which is equivalent to about 17 million Riyals at that time.
00:49As for the scheduled maintenance works for today, what is the actual effect of this stoppage in terms of maintenance, Mr. Fawaz, and will its effect continue for the second quarter of this year?
01:05There is no doubt that the effect, or most of the effect, will end with the end of the first quarter, and there will be no similar effect during the second quarter.
01:20As we mentioned in the announcement of the company, the main effect or the basis for the company to produce this quarter is due to the reduction in the volume of sales as a result of some stoppages scheduled in some other products.
01:40As we mentioned in the announcement of the company, the main effect or the basis for the company to produce this quarter is due to the reduction in the volume of sales as a result of some stoppages scheduled in some other products.
02:00As we mentioned in the announcement of the company, the main effect or the basis for the company to produce this quarter is due to the reduction in the volume of sales as a result of some other products.
02:20As we mentioned in the announcement of the company, the main effect or the basis for the company to produce this quarter is due to the reduction in the volume of sales as a result of some other products.
02:40Mr. Fawaz, the delay in China's economic recovery will have an impact on your demand?
02:50China's demand will have an impact on all producers, whether in the Gulf area or in some other areas around the world.
03:01However, the global economy has not fully recovered as a result of inflation and interest rates on loans and financing.
03:13All of this has contributed to a slowdown in the global economy, which has a general impact on demand and prices.
03:25Mr. Fawaz, we are also facing a competition for the prices of lignite.
03:30How will the prices of lignite affect the company?
03:34Do we expect that prices will improve in the near future so that the competition will be better for the petrochemical industry?
03:43Of course, this depends on the future expectations of the prices of lignite.
03:50As we mentioned in previous announcements, there will be an impact of 2.5% to 3% of the total cost of sales.
03:57However, in this quarter in particular, there was no major impact due to the increase in the prices of lignite as a result of some of the previous delays.
04:10What we are working on now is to ensure the safety of the company in general.
04:17We are working on the operation of the factories' trustworthiness, the allocation of spending and costs.
04:22All of this contributes to the absorption of many of the other prices.
04:26However, we hope that there will be a wider and better certainty in terms of the global economic growth and the increase in demand,
04:36especially in the Chinese market or in other related markets.
04:40We have seen some noticeable improvements in some markets, whether in the Middle East or Africa in general.
04:49However, this is not enough.
04:51We hope that the Chinese and European markets will return to normal.
04:56God willing, with the increase in prices, even gradually in the next quarter, we will work on a part of the increase in costs.
05:07How much has the company's funding cost increased today?
05:10We are also afraid that by the end of 2024 there will be no increase in interest rates, but a decrease, Mr. Fawaz.
05:22Today, the company's funding cost has increased.
05:24How much loans does the company have?
05:27Yes, my sister.
05:29We have a lot of money.
05:31If you will excuse me.
05:33In general, loans for the unified financial systems, according to international standards, reach approximately 6.5 billion Riyals.
05:40When we take it at the overall level, whether unified or non-unified, according to the applicable accounting standards since 2017,
05:50it reaches approximately 10 billion Riyals.
05:52We have certain fixed rates with fixed prices that do not affect the increase in interest rates.
06:00This reaches about 35 to 40 percent, including loans received from the industrial fund, for example,
06:08in addition to the process of financing that was done during the previous period.
06:15Thank God, we believe that there is a balance in terms of funding costs.
06:21In general, there is an increase of about 10 to 14 percent when we take it at the previous level.
06:27However, this is also met by an increase in income from the financial investments that we make with local banks,
06:40and we see that there is also an increase in revenues received in return for Islamic subsidies due to the investment of this financial base.
06:51Therefore, when we take it in general, the impact is negative, not significant.
06:56You also had the acquisition process on SAPCO.
06:59This is what changed the numbers a bit, Mr. Fawazi.
07:02Today, the impact that entered the 2023 list, is it still on the company as a result of this acquisition?
07:11This is a good question.
07:13Let me also touch on a subject that may be important, which is the process of restructuring the Lekrelek complex during the past period.
07:22We are moving forward in the process of completing the restructuring process in general,
07:28including the loans for the complex and the withdrawal from related companies that have a desire to withdraw,
07:37and they did not work with us in a positive way to restructure and improve the performance and operation of the complex.
07:46Therefore, we are at an advanced stage, I would say a certain percentage of 60 to 70 percent.
07:53We hope that in the third quarter, there will be an end to the restructuring process,
07:59which will give a great balance to the financial structure of the company.
08:07Today, we only have SAPCO, one of the companies that has been completely restructured and withdrawn since December 5, 2023.
08:18The second company, DAO, is currently operating on the same platform.
08:23When the acquisition is over, we will be in the final stages of signing agreements with the lenders.
08:33This will give positive results to the company in the third and fourth quarters.
08:41Investors are waiting for the distribution, Mr. Fawaz.
08:44We saw the last step in the process of transforming regulatory reservations into permanent profits.
08:51Are we promising investors good distribution despite these losses and after the regulatory reservations?
08:57God willing, we are always optimistic, and we hope that the contributors will be optimistic as well.
09:02The company, as I said, is going through a balance now.
09:07When we compare our situation with previous years, we are in a much better situation.
09:12We were able to reduce loans by about 60 percent compared to the average of loans in the past seven years.
09:20I think this is also a good thing for the contributors and the company.
09:27God willing, in the future, we will build distribution policies based on the support of the Management Board.
09:35But the distribution processes will pass according to the company's transfers and loans commitments.
09:41God willing, with this structure and the growth that we are working on now in terms of expanding some factories,
09:49especially the lithium factory, which God willing will give us 18 percent more production in the first half of 2026,
09:56the results will be positive.
09:59In addition to our investment in Tronics,
10:02which will meet the positive expectations of the product in 2024-2025.
10:10God willing, the results will be more positive.
10:13God willing, we will work together with the Management Board to consider the distribution process at that time.
10:23We wish you all the best.
10:25Of course, the contributor understands the current situation for the company,
10:30but distribution remains the most important part of these investments.
10:34Thank you, Mr. Fawaz bin Mohamed Al Fawazi, CEO of the National Manufacturing Company.
10:39Thank you very much.