DMEA: Fertiglobe results and Aramco backing

In this week’s DMEA, we look at Fertiglobe’s Q3 results improvement and Saudi Aramco’s backing for an industrial chemicals specialist.

The Fertiglobe joint venture (JV) between Dutch chemicals manufacturer OCI and Abu Dhabi National Oil Co. (ADNOC) this week announced a 2,000% increase in Q3 net profit.

In a filing to the Abu Dhabi Exchange on November 8, the company said that net profit had risen to $137.7mn during Q3, up from $6.2mn a year earlier, citing improved margins for ammonia and urea.

On the back of the results, the company increased its dividend guidance from $200mn to at least $240mn for the second half of 2021, which will be payable in April next year.

The positive results showing comes hot on the heels of the company’s successful initial public offering (IPO) which raised $795mn, with the JV partners selling just under 13.8% to achieve a company valuation of $5.8bn.

Investors included Singapore’s GIC sovereign wealth fund and Inclusive Capital Partners which committed a combined $150mn as ‘cornerstone investors’ before the final pricing was announced.

ADNOC and OCI reduced their individual shareholdings by 8% minus one share and 5.8% respectively, giving them 36.2% and 50% plus one share respectively.

Meanwhile, Saudi-based Amad Chemicals Co. this week received a $1.3mn loan from Aramco’s investment arm Wa’ed to finance the company’s expansion in the Kingdom.

The funds have been earmarked for the development of a new chemicals and coatings production facility at Aramco’s King Salman Global Maritime Industries Complex, which is being constructed at Ras Al Khair north of Jubail in Eastern Province.

Amad said the new facility will comply with environmental standards set by the United Nations’ International Marine Organization (IMO), promoting “the reduction of industrial waste and pollution, particularly in the maritime and offshore sectors”.

The loan aligns with Wa’ed’s objective of supporting the localisation efforts of companies focused on sustainability while also fitting within Aramco’s local content in-Kingdom total value-add (iktva) initiative and commitments to Saudi Vision 2030. “The loan will also help generate local jobs for Saudi professionals,” Wa’ed said.