SABIC posts 67% fall in Q3 profit on higher costs, impairment

Saudi petrochemicals major SABIC posted a 67.1% year-on-year drop in its third quarter net profit on the back of higher costs despite an increase in sales volumes, said Reuters.

The company's third-quarter net income was weighed by higher cost of sales and an increase in selling and distribution costs, SABIC said in a filing to the Saudi bourse, Tadawul on 30 October.

The company said that an impairment provision of SR510m "was recognised in financial assets", without elaborating further.

On a quarter-on-quarter basis, SABIC's net profit fell by 76.8% in July-September this year as sales dropped by 16.3% amid lower selling prices.

The average sales prices in the third quarter of 2022 decreased by 15% compared with the second quarter, it said.

Sales volumes also decreased by 1% in the third quarter of 2022 compared with the second quarter.

For the first nine months of this year, SABIC said that the year-on-year drop in its net income was due to the rise in costs and higher feedstock prices, on top of higher selling and distribution costs.

As per MRC, SABIC, a global leader in the chemical industry, has named Conventus Polymers LLC, as an authorized distributor of high-performance engineering thermoplastics in the US, Canada and Mexico. Conventus Polymers will provide SABIC customers with products from SABIC's Specialities business, including ULTEM resins and LNP compounds, and related services such as application development and customer support.

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Teijin Frontier Co., Ltd., the Teijin Group’s fibers and products converting company, announced that its core base for polyester fiber manufacturing, Teijin Polyester (Thailand) Limited (TPL), launched a cutting-edge automated facility for the highly efficient production of polyester filaments, said Polymerupdate.

Operation began this month. The new facility is equipped with multi-spindle spinning machines for polyester multifilament yarn and machines capable of adding functional agents. Teijin Frontier invested approximately JPY one billion to construct the facility, which is expected to produce 1,500 tons of polyester filaments annually by the fiscal year ending in March 2024.

The facility will enhance the added value of TPL including through extra-efficient spinning and an automated process for the uniform drying of multifilament. TPL will effectively use the new facility to produce Teijin Frontier’s proprietary polyester filaments for apparel and interior applications, such as the Octa TM highly modified hollow-core fiber and a water-absorbing quick-drying yarn.

Teijin Frontier expects to expand the range and improve the functionality of its ECOPET® recycled polyester fibers by integrating the new facility with a separate facility that started operating at TPL in January to convert used plastic bottle flakes sourced in the Thai market into recycled polyester chips. The new facility accommodates various special polymers and recycled raw materials and additionally can add functional agents to raw yarn for the production of new types of functional polyester filaments.

We remind, Teijin Frontier Co., Ltd., the Teijin Group's fibres and products converting company, has developed an 'eco-friendly' tire cord made from an adhesive that does not contain resorcinol formaldehyde (RF). Designed for rubber reinforcement, the cord also delivers ‘low environmental impact’ through incorporating chemically recycled polyester fibre, said the company in a 12 Sept statement.
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Italy is working on ways to keep a Lukoil-owned refinery in business despite new sanctions against Russia kicking in next month, as Rome tries to buy time to agree the sale of the plant, three sources close to the matter told Reuters.

Lukoil's ISAB refinery in Sicily stands to be hit by an embargo on seaborne Russian oil that comes into force on Dec. 5, putting at risk jobs in Italy's poorer south and the country's refining capacity.

Although Lukoil is not affected by the sanctions, the ISAB plant has been forced to rely solely on Russian oil after creditor banks halted financing and stopped providing guarantees the refinery needs to buy oil from alternative suppliers.

Adolfo Urso, industry minister in Italy's new government, on Thursday said a solution would be found in coming weeks.

The sources said the government was trying to find ways to ensure the plant can receive financing from lenders and remain operational.

The issue was discussed in a meeting at Italy's industry ministry on Oct. 17 with representatives from Italy's top two banks, Intesa Sanpaolo and UniCredit, and from state-owned export credit agency SACE, minutes of the meeting seen by Reuters showed.

Lukoil was not immediately available for comment.

We remind, Lukoil has named a new top manager at its refinery in Sicily amid efforts by the Italian government to find a buyer for the plant and shield it from sanctions on Russian oil. The Russian group has picked Eugene Maniakhine as director general at its ISAB plant in the Sicilian town of Priolo, Lukoil's Italian unit said in a statement.
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Clariant and Dorf Ketal, two of the world's leading specialty chemical products and services companies, have today announced a definitive agreement for Dorf Ketal to acquire Clariant's North American (NORAM) Land Oil business, a provider of chemical technologies and services to the North American oil and gas industry, said the company.

The transaction announced today is subject to regulatory and other customary closing conditions and is expected to be finalized during the first quarter of 2023.

Clariant's NORAM Land Oil business, which posted 2021 revenues of USD113 million, represents an exciting growth opportunity for Dorf Ketal. Once completed, the acquisition will include all the assets of Clariant's NORAM Land Oil business, including a team of 170 employees in North America, a technology portfolio of more than 40 patent families, and manufacturing units located in Bakersfield, California; Midland, Texas; and Black Hills, Texas producing more than 2,000 formulations for drilling, production, and stimulation.

"This acquisition will bring additional strategic assets, innovative new technology, talented people, and strong customer relationships into Dorf Ketal," said Sudhir Menon, Chairman, of Dorf Ketal Chemicals India Private Limited. "Upon completion, it will enable our continued growth in North America – a significant and growing market for energy services, further aligning with our global focus and commitment to providing innovative services throughout the energy sector."

"The divestment of the North American Land Oil business is another logical step in repositioning Clariant's portfolio towards true specialty chemicals and in our sustainability transformation journey. With its strong reputation as a supplier of premium oilfield chemical products and services, its geographical presence, and its solid customer relationships, Dorf Ketal is the right owner for the combined business, for our employees, customers, and other stakeholders," said Conrad Keijzer, CEO at Clariant.

We remind, Clariant will create a second production line at its new CHF 60 million state of the art facility for Exolit OP halogen-free flame retardants currently under construction in Daya Bay, China. This additional CHF 40 million investment will further expand access to innovative and sustainable fire protection solutions and related technical expertise to support the significant growth of engineering plastics applications in E-mobility and electrical & electronic segments.

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The vinyls business of the Mexican producer Orbia reported on Wednesday a year-on-year decline in earnings because of lower sales and higher costs, said the company.

The following table shows the Q3 performance of Orbia's Polymer Solutions business, which includes Vestolit and Alphagary. It makes polyvinyl chloride (PVC). Revenue fell because of lower volumes and lower prices for general resins, Orbia said. Demand fell, and key markets had greater access to lower cost PVC.

In particular, COVID lockdowns in China encouraged producers there to export PVC to make up for the decline in domestic demand. These trends more than offset the benefits of higher prices for Orbia's specialty resins and derivatives.

Earnings fell because of lower volumes as well as higher costs for feedstock and energy, particularly in Europe. Orbia's other business groups include Building and Infrastructure, Precision Agriculture, Connectivity Solutions and Fluorinated Solutions.

In this October, Orbia's Fluorinated Solutions business Koura, a global leader in the development, manufacturing and supply of fluoroproducts, on 19 Oct 2022 announced it has received a USD100 M award from the US Department of Energy (DOE) as part of the first set of projects funded by the President's Bipartisan Infrastructure Law to expand domestic manufacturing of batteries for electric vehicles (EVs) and the electrical grid and for materials and components currently imported from other countries. This award supports state-of-the-art lithium-ion battery manufacturing for supply chain security and competitiveness.
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