Saudi SAFCO Q1 Net Profit Slumps 30%, Misses Forecasts

Saudi Arabia Fertilizers Co (SAFCO) said on Tuesday its first-quarter net profit tumbled 30 per cent from a year ago, missing analysts’ forecasts due to lower sales and prices of its products.

It is the seventh quarter in the last eight in which the firm has posted decreasing profits.

The company, a unit of Saudi Basic Industries Corp (SABIC), one of the world’s biggest petrochemical companies, said it made SAR590 million ($157.3 million) in the three months to March 31, compared to SAR843 million a year ago.

A group of six analysts polled by Reuters had on average forecast that SAFCO would make a quarterly profit of SAR725.2 million.

The company cited a decline in both sales and the price of its products for the profit decline, as well as the reduction of its share of profits from an affiliate.

SAFCO, a big producer of ammonia and urea, is dependent on global demand and prices. Since mid-2013, global players have voiced increasing concerns over the continued fall of urea prices due to China’s ramp up in output.

In March, SAFCO said the start-up of its new urea plant will be delayed to mid-May this year.