Methanol Chemicals Co. — Earnings Release 2015

Feb 22, 2016

Methanol Chemicals Co. announces the annual financial results for the period ending on 31-12-2015

2001 · 22/02/2016 16:01:02 · Announcement #41294 · View on Saudi Exchange

Methanol Chemicals Co. announces the annual financial results for the period ending on 31-12-2015

Element	Current year	Previous year	% Change
Net profit (loss)	-139.36	32.2	-
Earning or loss per share, Riyals	-1.16	0.27	-
Gross profit (loss)	39.31	188.38	-79.13
Operational profit (loss)	102.65	71.16	44.25

*All figures are in (Millions) Saudi Arabia, Riyals

Element	EXPLAINATION
Reasons of annual financial results	The company losses amounted to SAR 139.36 million as compared to net profit of SAR 32.2 million for the same period last year were attributed to following reasons 1- Sales for the period declined by SAR 151.3 million which represents a decline of 17% as compared to sales for the same period last year. This decline was mainly attributed to major reduction in sales prices influenced by continued decline in methanol prices globally which in turn affected the pricing of some of the company main downstream products coupled with stiff competition in the main areas for the company products in local markets India China and East Asia prompting the company to provide additional discounts in order to maintain market share.2- Decline in sales due to the fire that erupted in the Paraformaldehyde plant as per the announcement in Tadawul dated 16/09/1435 A. H. corresponding to 13/07/2014 the plant resumed operation only on 16th April 2015 and gradually start to gain back its market share 3- The cost of sales was charged an additional provision to account for inventory slow moving items and additional provision to account for finished goods inventories cost difference to their net realizable value totaling SAR 14.33 million . The cost of sales was also charged with shutdown costs related to Methanol DMF and Penta plants as announced on Tadawul 14/12/2015 which incurred total cost of SAR 11.5 million.4- The other provision account includes an additional provision of SAR 15 million to cover a disputed claim from one of the Company suppliers 5. General and Administrative expenses has increased by SAR 4 million due to increase in professional fees by 2 Million against positive adjustment of SAR 2 million in 2014. Other factors that affected the current year results as compared to the previous year are as follows1- Under other (expenses) Income account write-off of SAR 6.3 million was accounted for related to projects which have been postponed till the global economy improves 2- In the 2nd quarter 2014 the company gained SAR 4.8 million due to a refund from the Department of Zakat and Income Tax 3- Financial charges during 2015 also reduced due to the positive impact of interest rate swap and lower interest payment due to repayment of long term loans.
Other notes	Comparative figures were reclassified to conform to the current period presentation. Such reclassification did not affect either net worth or net income.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.