Advanced Petrochemical CEO Mamdouh Al-Amri
Advanced Petrochemical Co. expects lower propane prices and freight costs to help maintain profit margins at roughly the same level in the second quarter of this year, despite the difficulty of forecasting prices amid the current geopolitical situation, CEO Mamdouh Al-Amri told Argaam. 
Al-Amri added that the company observed a decline in selling prices during late June and early July compared to previous months. He noted that propane supplies returned to normal levels in June and have remained stable so far, expressing hope that they will continue at the same levels in the coming period.
Commenting on developments in the Strait of Hormuz, he explained that the company was forced to reroute shipments from Dammam and Jubail ports to Yanbu and Red Sea ports, increasing freight costs to around $200 per ton. However, higher net selling prices helped offset the additional shipping costs.
Regarding the company’s copolymer products, Al-Amri said Advanced began producing higher-value applications in June. These products are currently in the final testing phase and are expected to become part of the company’s sales during the second half of 2026. He expects these applications to improve profit margins by an average of $40 per ton for the quantities produced.
He added that the company, through its marketing arm, has started marketing these products in the European market, which it considers a key market, and is currently preparing to sign distribution agreements with European distributors in the coming period.
Al-Amri also confirmed that the Advanced Polyolefins Co. plant reached its nameplate production capacity by the end of December 2025. He said that if profit margins and current production levels are maintained, the new plant will surpass its break-even point and contribute to increasing the company’s profitability.
Regarding maintenance activities, he explained that bringing forward part of the scheduled 2027 maintenance resulted in the recognition of a one-off, non-cash depreciation expense of approximately SAR 20 million.
However, this is expected to increase production volumes going forward and reduce scheduled maintenance days next year by 50%. He confirmed that no major shutdowns are planned during the second half of 2026.
Discussing the company’s second-quarter results, Al-Amri attributed the losses to reduced propane supplies during April and May, while the income statement continued to bear depreciation expenses, fixed operating costs, and financing costs related to the new project. He noted that the company has been recognizing these expenses since the second half of 2025.
He added that lower propane supplies reduced production volumes by approximately 55% compared to the previous quarter and lowered sales volumes by around 45%, negatively affecting the company’s results. This came despite gross profit margins increasing by 27% quarter-on-quarter and 12% compared to the corresponding quarter of 2025.
Al-Omari further noted that the company recorded a SAR 20 million gain from its asset swap transaction with SK Gas during the first quarter of 2026. Beginning in the second quarter of 2026, the company started recognizing its full share of the new plant’s results.
According to Argaam data, Advanced Petrochemical, a producer of polypropylene, reported a net loss of SAR 69 million for the first half of 2026, compared with a net profit of SAR 153 million in the corresponding period of 2025.
Advanced Petrochemical CEO Mamdouh Al-Amri
Advanced Petrochemical Co. expects lower propane prices and freight costs to help maintain profit margins at roughly the same level in the second quarter of this year, despite the difficulty of forecasting prices amid the current geopolitical situation, CEO Mamdouh Al-Amri told Argaam.
Al-Amri added that the company observed a decline in selling prices during late June and early July compared to previous months. He noted that propane supplies returned to normal levels in June and have remained stable so far, expressing hope that they will continue at the same levels in the coming period.
Commenting on developments in the Strait of Hormuz, he explained that the company was forced to reroute shipments from Dammam and Jubail ports to Yanbu and Red Sea ports, increasing freight costs to around $200 per ton. However, higher net selling prices helped offset the additional shipping costs.
Regarding the company’s copolymer products, Al-Amri said Advanced began producing higher-value applications in June. These products are currently in the final testing phase and are expected to become part of the company’s sales during the second half of 2026. He expects these applications to improve profit margins by an average of $40 per ton for the quantities produced.
He added that the company, through its marketing arm, has started marketing these products in the European market, which it considers a key market, and is currently preparing to sign distribution agreements with European distributors in the coming period.
Al-Amri also confirmed that the Advanced Polyolefins Co. plant reached its nameplate production capacity by the end of December 2025. He said that if profit margins and current production levels are maintained, the new plant will surpass its break-even point and contribute to increasing the company’s profitability.
Regarding maintenance activities, he explained that bringing forward part of the scheduled 2027 maintenance resulted in the recognition of a one-off, non-cash depreciation expense of approximately SAR 20 million.
However, this is expected to increase production volumes going forward and reduce scheduled maintenance days next year by 50%. He confirmed that no major shutdowns are planned during the second half of 2026.
Discussing the company’s second-quarter results, Al-Amri attributed the losses to reduced propane supplies during April and May, while the income statement continued to bear depreciation expenses, fixed operating costs, and financing costs related to the new project. He noted that the company has been recognizing these expenses since the second half of 2025.
He added that lower propane supplies reduced production volumes by approximately 55% compared to the previous quarter and lowered sales volumes by around 45%, negatively affecting the company’s results. This came despite gross profit margins increasing by 27% quarter-on-quarter and 12% compared to the corresponding quarter of 2025.
Al-Omari further noted that the company recorded a SAR 20 million gain from its asset swap transaction with SK Gas during the first quarter of 2026. Beginning in the second quarter of 2026, the company started recognizing its full share of the new plant’s results.
According to Argaam data, Advanced Petrochemical, a producer of polypropylene, reported a net loss of SAR 69 million for the first half of 2026, compared with a net profit of SAR 153 million in the corresponding period of 2025.
