Petro Rabigh reduces its losses despite operational pressures.. What happened in 2024?

Petro Rabigh company was able to reduce its annual losses by 3% during the year 2024, amounting to 4.5 billion riyals ($1.2 billion), according to a statement issued on the Saudi Stock Exchange (Tadawul).

The company indicated that this slight decrease in losses was achieved despite the operational pressures it faced, noting that one of the factors contributing to this was the establishment of a one-time provision of 365.7 million riyals to address a legal claim against it by a third party, which affected its financial results.

Annual Revenue Decline Due to Decreased Sales

Petro Rabigh recorded a 12% decline in its annual revenues, falling to 39.3 billion riyals due to decreased sales volumes and falling prices of refined products. The financial performance was also affected by the unscheduled shutdown of the olefins cracking unit during the first quarter of 2024 for routine maintenance, leading to production disruption. Additionally, feedstock costs increased, including ethane, fuel oil, and sales gas, which added further pressure on profit margins since the beginning of the year.

Accumulated Losses Exceed 7 Billion Riyals

With ongoing operational and financial challenges, Petro Rabigh's accumulated losses reached 7.1 billion riyals by the end of 2023, representing 42.81% of the capital of 16.7 billion riyals. This situation prompted the company to take financial measures to adjust its financial structure and mitigate the worsening of losses, aiming to restore financial balance and enhance operational sustainability.

As part of its plans to improve its financial position, Petro Rabigh announced that its main shareholders, Aramco and Sumitomo Chemical, waived the renewed shareholder loans, helping reduce the accumulated losses to 33.84% of the capital by the end of February 2024. This step is part of a financial restructuring strategy aimed at strengthening the financial position and reducing operational pressures, placing the company on a more stable long-term trajectory.

Petro Rabigh Stock Rises in the Saudi Stock Market

In terms of trading, Petro Rabigh’s stock (TADAWUL: 2380) rose by 0.43%, increasing by 0.030 riyals per share, traded at 6.99 riyals during the Saudi Stock Exchange transactions, reflecting investor reactions to the recent updates regarding the company's financial performance.

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