3M/Q1 2019 FINANCIAL RESULTS SIPCHEM 3M/Q1 2019 EARNINGS CALL Date: Tuesday, April 30, 2019 Time: 03:45 PM (Saudi) 04:45 PM (Dubai) 01:45 PM (London) 08:45 PM (New York)
DISCLAIMER Disclaimer and important information in relation to this presentation This presentation has been prepared solely for use at the investor presentation concerning the financial results of Saudi International Petrochemical Company ( Sipchem ). By attending the investor presentation, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation has been prepared by Sipchem solely for use by you at the investor presentation, held in connection with Sipchem’s financial results. The information contained in this presentation does not purport to be comprehensive and has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. The information set out in this presentation may be subject to updating, revision, verification and amendment and such information may change materially. Sipchem is under no obligation to update or keep current the information contained in this presentation and any opinions expressed in it is subject to change without notice. None of Sipchem or any of its affiliates, advisers or representatives: (i) makes any representation or warranty, express or implied, as to the truth, fairness, accuracy or completeness of the information in this presentation (or whether any information has been omitted from this presentation); or (ii) shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this presentation or its contents, or otherwise arising in connection with this presentation. The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons. This presentation does not constitute or form part of any offer to sell or issue or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of Sipchem or any of its subsidiaries or affiliates, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. The information and opinions contained in this presentation are provided as at the date of the presentation and are subject to change. Certain statements in this presentation constitute "forward-looking statements". These statements include records of intentions, beliefs or expectations with respect to, amongst other things, operations, financial conditions, liquidity, prospects, growth, strategies and the dividend policy of Sipchem, its subsidiaries, affiliates and the industries in which they operate. These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Sipchem’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, commodity price volatility and risks relating to technology, shared utilities, competition and price, financing, litigation, general operations, environment, feedstock supply and price, project interface and foreign exchange, as well as different market conditions and the prospects for growth anticipated by the management of Sipchem. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this presentation. As a result, you are cautioned not to place undue reliance on such forward-looking statements. Sipchem disclaims any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made in this presentation, except where it would be required to do so under applicable law. SIPCHEM Q1 2019 EARNINGS CALL 2
12M/ANNUAL 2018 RESULT Highlights Operations Financials SIPCHEM Q1 2019 EARNINGS CALL 3
CHEMICALS BUSINESS Chemical Product Performance Plant Performance +18% +9% • Methanol • Butanediol, Tetrahydrofuran • Maleic Anhydride • Carbon Monoxide 637 595 • Gamma Butyrolactone 546 538 • Acetic Acid • Acetic Anhydride • Vinyl Acetate Monomer and Ethyl / Butyl Acetate Q1 2018 Q1 2019 Q1 2018 Q1 2019 Sales ('000 MT) Production ('000 MT) SIPCHEM Q1 2019 EARNINGS CALL 4
POLYMERS BUSINESS Polymers Product Performance Plant Performance +1% -6% • LDPE • EVA • PBT • Cross linkable LDPE • Semi conductive LDPE 78 76 75 73 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Production ('000 MT) Sales ('000 MT) SIPCHEM Q1 2019 EARNINGS CALL 5
SIPCHEM Q1 2019 EARNINGS CALL 6
SIPCHEM HIGHLIGHTS AT A GLANCE…. Key Message: Improved market conditions, netback contribution and cost advantage position Growth Focus Capabilities Focus Sustainability Focus Profitability and Performance Capital Structure, Investment / Financial Risk 2016 2017 2018 Q1 2019 2016 2017 2018 Q1 2019 SAR Million 2015 SAR Million 2015 IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS Sales Capital Expenditure 711 479 610 859 141 3,515 3,515 4,460 5,036 1,122 ROCE (%) EBITDA 1,982 447 7.5% 3.1% 6.9% 8.4% 7.8% 1,234 1,165 1,648 EBITDA Margin Dividend Cover (x) 1.25 - - 1.00 0.65 35.1% 33.2% 36.9% 39.4% 39.9% Efficiency and Effectiveness Liquidity and Stability 2016 2017 2018 Q1 2019 2016 2017 2018 Q1 2019 SAR Million 2015 SAR Million 2015 IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS Capex/Depreciation (x) 1.0 0.7 1.0 1.1 0.8 Current Ratio (x) 2.01 1.58 1.96 1.58 1.66 88% 90% 85% 87% 88% Avg days on Stream-YTD % Quick Ratio (x) 1.64 1.22 1.60 1.16 1.25 84% 90% 90% 72% 88% Avg days on Stream- Q1 % Cash from Operations 927 909 1,694 1,661 379 3.0 3.4 4.6 4.9 4.4 Sales/employee SIPCHEM Q1 2019 EARNINGS CALL 7
SEGMENTATION OVERVIEW Key Message: Netback contribution and low cost advantage lead the way… Q1 2018 Q1 2019 REVENUES 13% 8% CHEMICAL 24% 25% POLYMERS 63% 68% OTHER Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “ IPC, GACI Other: “SMC & Foreign subsidiaries, SSPC” Q1 2018 Q1 2019 EBITDA MARGIN 9% 6% 3% 9% 19% CHEMICAL 25% 22% 31% 71% 60% 66% POLYMERS 78% OTHER Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “ IPC, GACI Other: “SMC & Foreign subsidiaries, SSPC” SIPCHEM Q1 2019 EARNINGS CALL 8
FINANCIALS OVERVIEW 3M/Quarterly 2019 financial results -4% -24% 1,171 151 0.41 1,122 115 0.31 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Earning Per Share (EPS) Sales/Revenue Net Profit All Figures are in (Millions) Saudi Arabia, Riyals Overview: • Net Profit attributable to shareholders of the company decreased during current quarter compared to the same quarter of the previous year due to lower Sales Revenue as a result of lower selling prices for most of the company’s products, partially of fset by increased sales volumes in the quarter. • Profit was impacted by increase in other income / loss for expenses for proposed merger, including merger integration planning. • The increase in finance cost was mostly driven by increase in effective interest rate cost (EIR) under Sipchem’s and Sipchem’ s affiliates loan facilities, which at floating rate cost linked to SAIBOR have been impacted by increasing interest rates. SIPCHEM Q1 2019 EARNINGS CALL 9
31 March 2019 COMPARED TO PREVIOUS PERIODS Balance Sheet (Million, SAR) 3/31/2019 12/31/2018 Variance % Change 2,538 2,225 313 14% Current Assets (excl. Inventory) Inventory 836 807 29 4% 11,299 11,275 24 0% Fixed Assets Other Assets 1,046 1,073 -27 -3% 15,719 15,380 339 2% Total Assets Current Liabilities 2,030 1,925 105 5% 6,657 6,330 327 5% Non-Current Liabilities Shareholders Equity 5,797 5,919 -122 -2% Minority Interests 1,235 1,206 29 2% Total Liabilities & Shareholder Equity 15,719 15,380 339 2% Current Ratio 1.66 1.58 0.09 6% Quick Ratio 1.25 1.16 0.09 8% SIPCHEM Q1 2019 EARNINGS CALL 10
Q1, 2019 VS Q1,2018 CASH FLOW Cash flow (Million, SAR) 3/31/2019 3/31/2018 Variance % Change 173 259 -86 Income before Zakat/Tax & Non-controlling Interests -33% Depreciation 174 202 -28 -14% Working Capital / other 32 62 -30 -48% Net cash provided by operating activities 379 523 -144 -28% Purchase of PPE -142 -179 37 -21% Others Investing activities 4 4 0 0% Net cash used in investing activities -138 -175 37 -21% Changes in short term loans 0 0 0 #DIV/0! Changes in long term loans 331 203 128 63% Dividends paid -238 0 -238 #DIV/0! Non controlling interest / other -51 -82 31 -38% Net cash from financing activities 42 121 -79 -65% Changes in cash & cash equivalents 283 469 -186 -40% Cash & cash equivalents at 1 Jan 1,014 1,723 -709 -41% Exchange rate Changes Impact 1 2 -1 -50% Cash & cash equivalents at end of period 1,298 2,194 -896 -41% SIPCHEM Q1 2019 EARNINGS CALL 11
SIPCHEM Q1 2019 EARNINGS CALL 12
For further enquiries, please contact: Sipchem Investor Relations Team E-Mail: sipchemir@sipchem.com Office: +966 13 801 9200 SIPCHEM Q1 2019 EARNINGS CALL 13
Q&A SIPCHEM Q1 2019 EARNINGS CALL 14
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