Advanced Petrochemical CEO: Debt reduction is a priority and supports return to profitability.. and the stock price is unfair

Mamdouh Al-Omari, CEO of Advanced Petrochemical Company

Mamdouh Al-Omari, CEO of Advanced Petrochemical Company, said that the company has liquidity exceeding 100 million riyals, and its current priority is to reduce debt, targeting repayment of 300 million riyals by the end of 2026, which will reflect positively on its financial results and support a return to profitability. Al-Omari added, in an interview with CNBC Arabia, that the company's production from June will be more than 10% higher compared to 2025, and sales will be better than last year due to the entry of the new plant, which increased production capacity from 600,000 tons to 1.4 million tons, boosting output by about 35%. Regarding shipping costs, Al-Omari stated that shipping costs have risen due to higher insurance costs to about $120 per ton, in addition to increased transportation costs to ports on the western coast of the Kingdom. He noted that higher selling prices offset the increase in shipping costs, pointing out that product prices in some markets rose from about $900 to $950 per ton before geopolitical tensions to $1,400-$1,500 per ton, enabling the company to achieve operating profits despite those tensions. He added that the company has a network of distributors in Asia, Europe, Africa, Egypt, and North Africa, and its foreign sales were not affected thanks to pre-agreements with distributors. Regarding expansion plans, Al-Omari confirmed that the company continues to implement its strategy focused on stabilizing operations and improving plant efficiency and reliability, along with expanding into new markets, especially Europe, noting that the company has the ability to produce more than 160 polypropylene products. As for the stock, Al-Omari said that the company's management sees the Advanced Petrochemical stock as attractive to shareholders at present, and when looking at the near future and the company's position, we consider the stock price to be unfair, while affirming that the company has no intention to buy back its shares at this time. According to Argaam data, Advanced Petrochemical Company, which produces polypropylene, recorded losses of 69 million riyals at the end of the first half of 2026, compared to profits of 153 million riyals achieved during the same period of 2025.

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