3M/Q1 2019 FINANCIAL RESULTS SIPCHEM 3M/Q1 2019 EARNINGS CALL Date: - - PowerPoint PPT Presentation

3m q1 2019 financial results
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3M/Q1 2019 FINANCIAL RESULTS SIPCHEM 3M/Q1 2019 EARNINGS CALL Date: - - PowerPoint PPT Presentation

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


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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)

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SIPCHEM Q1 2019 EARNINGS CALL 2

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

  • r 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

  • bligation 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.

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SIPCHEM Q1 2019 EARNINGS CALL 3

12M/ANNUAL 2018 RESULT Highlights Operations Financials

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SIPCHEM Q1 2019 EARNINGS CALL 4

Plant Performance

CHEMICALS BUSINESS

Chemical Product Performance

  • Methanol
  • Butanediol,

Tetrahydrofuran

  • Maleic Anhydride
  • Carbon Monoxide
  • Gamma Butyrolactone
  • Acetic Acid
  • Acetic Anhydride
  • Vinyl Acetate

Monomer and Ethyl / Butyl Acetate Sales ('000 MT) Production ('000 MT)

538 637 Q1 2019 Q1 2018 +18% 546 595 Q1 2018 Q1 2019 +9%

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SIPCHEM Q1 2019 EARNINGS CALL 5

Plant Performance

  • LDPE
  • EVA
  • PBT
  • Cross linkable LDPE
  • Semi conductive LDPE

Sales ('000 MT) Production ('000 MT)

POLYMERS BUSINESS

Polymers Product Performance

78 73 Q1 2019 Q1 2018

  • 6%

75 76 Q1 2018 Q1 2019 +1%

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SIPCHEM Q1 2019 EARNINGS CALL 6

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SIPCHEM Q1 2019 EARNINGS CALL 7

SAR Million

2015 2016 IFRS 2017 IFRS 2018 IFRS

Q1 2019 IFRS

Capex/Depreciation (x)

1.0 0.7 1.0 1.1 0.8

Avg days on Stream-YTD %

88% 90% 85% 87% 88%

Avg days on Stream- Q1 %

84% 90% 90% 72% 88%

Sales/employee

3.0 3.4 4.6 4.9 4.4

Profitability and Performance Sustainability Focus Capabilities Focus Growth Focus Efficiency and Effectiveness Capital Structure, Investment / Financial Risk Liquidity and Stability

SAR Million

2015 2016 IFRS 2017 IFRS 2018 IFRS

Q1 2019

IFRS

Sales

3,515 3,515 4,460

5,036 1,122

EBITDA

1,234 1,165 1,648 1,982 447

EBITDA Margin

35.1% 33.2% 36.9% 39.4% 39.9%

SAR Million

2015 2016 IFRS 2017 IFRS 2018 IFRS

Q1 2019

IFRS

Current Ratio (x)

2.01 1.58 1.96 1.58 1.66

Quick Ratio (x)

1.64 1.22 1.60 1.16 1.25

Cash from Operations

927 909 1,694 1,661 379

SAR Million

2015 2016 IFRS 2017 IFRS 2018 IFRS

Q1 2019 IFRS

Capital Expenditure

711 479 610 859 141

ROCE (%)

7.5% 3.1% 6.9% 8.4% 7.8%

Dividend Cover (x)

1.25

  • 1.00

0.65

Key Message: Improved market conditions, netback contribution and cost advantage position

SIPCHEM HIGHLIGHTS AT A GLANCE….

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SIPCHEM Q1 2019 EARNINGS CALL 8

Q1 2018 POLYMERS

REVENUES

Key Message: Netback contribution and low cost advantage lead the way…

SEGMENTATION OVERVIEW

Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries, SSPC”

EBITDA MARGIN

71% 22% 6% 60% 31% 9%

Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries, SSPC”

CHEMICAL OTHER POLYMERS CHEMICAL OTHER Q1 2019

68% 24% 8% 63% 25% 13% 78% 19% 3% 66% 25% 9%

Q1 2018 Q1 2019

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SIPCHEM Q1 2019 EARNINGS CALL 9

3M/Quarterly 2019 financial results

FINANCIALS OVERVIEW

Earning Per Share (EPS) Net Profit

151 115 Q1 2018 Q1 2019

  • 24%

0.41 Q1 2018 0.31 Q1 2019

Sales/Revenue

1,171 1,122 Q1 2018 Q1 2019

  • 4%

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 offset 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.

All Figures are in (Millions) Saudi Arabia, Riyals

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SIPCHEM Q1 2019 EARNINGS CALL 10

31 March 2019 COMPARED TO PREVIOUS PERIODS

Balance Sheet

(Million, SAR)

3/31/2019 12/31/2018 Variance % Change Current Assets (excl. Inventory)

2,538 2,225 313 14%

Inventory

836 807 29 4%

Fixed Assets

11,299 11,275 24 0%

Other Assets

1,046 1,073

  • 27
  • 3%

Total Assets

15,719 15,380 339 2%

Current Liabilities

2,030 1,925 105 5%

Non-Current Liabilities

6,657 6,330 327 5%

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%

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SIPCHEM Q1 2019 EARNINGS CALL 11

Cash flow

Q1, 2019 VS Q1,2018 CASH FLOW

(Million, SAR) 3/31/2019 3/31/2018 Variance % Change Income before Zakat/Tax & Non-controlling Interests 173 259

  • 86
  • 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%

Net cash used in investing activities

  • 138
  • 175

37

  • 21%

Changes in short term loans

#DIV/0!

Changes in long term loans 331 203 128

63%

Dividends paid

  • 238
  • 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%
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SIPCHEM Q1 2019 EARNINGS CALL 12

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SIPCHEM Q1 2019 EARNINGS CALL 13

For further enquiries, please contact:

Sipchem Investor Relations Team

E-Mail: sipchemir@sipchem.com Office: +966 13 801 9200

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SIPCHEM Q1 2019 EARNINGS CALL 14

Q&A

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SIPCHEM Q1 2019 EARNINGS CALL 15