Petro Rabigh Stock: Comprehensive Analysis of Performance and Financial

Rabigh Refining and Petrochemical Company (Petro Rabigh) was established as a Saudi joint-stock company listed on the Saudi financial market (Tadawul) under the basic materials sector – chemicals. The company operates the first integrated refining and petrochemical complex in the Kingdom located in Rabigh, and it was formed as a partnership between oil giant Saudi Aramco and Japan's Sumitomo Corporation. The company aims to enhance the added value of national resources by producing petroleum derivatives such as gasoline, diesel, and fuel oil, along with petrochemicals like ethylene and ethylene glycol. Petro Rabigh enjoys a competitive advantage due to the integration of its facilities, providing it with flexibility to cope with market and raw material fluctuations. In recent years, Aramco has strengthened its control over the company by acquiring a majority stake, which supports financial stability and expands growth and development opportunities in a competitive industrial environment.

At the beginning of 2024, Petro Rabigh announced that its accumulated losses reached approximately 38.34% of its capital, later decreasing to 36.16% by August 2024. This slight decline is attributed to several factors, including the restructuring of loans and shareholders' waiving part of the revolving loans, in addition to some improvement in operational results after maintenance periods. Accumulated losses of this magnitude reflect structural challenges in revenues and operational efficiency, especially given the company's sensitivity to fluctuations in feedstock and energy prices. It is important to note that exceeding losses of 35% of capital places the company under special scrutiny according to the regulations of the Saudi Capital Market Authority, requiring corrective actions such as increasing capital, which it indeed undertook in 2025 through a private placement of priority rights shares for founding shareholders.

Petro Rabigh's stock experienced notable fluctuations from the end of 2024 to the beginning of 2025, with the stock price ranging between 8–12 Saudi Riyals. This price movement reflects market reactions to operational news, such as periodic maintenance work, as well as strategic developments like Aramco's announcement of acquiring a majority stake. Based on these prices and the number of outstanding shares, the company's market capitalization ranged between 30 and 50 billion Saudi Riyals, placing it among the mid-cap companies in the Saudi petrochemical and industrial sector. It should be noted that the continued accumulated losses render the price-to-earnings (P/E) ratio meaningless at this time, classifying the stock as a loss-making stock from an accounting perspective.

The financial performance indicators for Petro Rabigh stock heavily depend on operational results, which are in turn affected by fluctuations in oil and gas prices, operational efficiency, and scheduled maintenance operations. Given the ongoing losses, the P/E ratio cannot be calculated conventionally, while book value multiples reflect high ratios compared to similar companies with stable profitability. The accumulated losses exceed one-third of the capital, and there have been no dividends for shareholders in recent years. Profit margins have been adversely affected due to rising feedstock prices and operational challenges. On the other hand, the increase in capital and shareholders' waiving part of the loans indicate efforts to restore financial balance and improve solvency.

Petro Rabigh's financing policy has been characterized by reliance on paid-in capital from founding shareholders, along with revolving loans provided by Aramco and Sumitomo. In recent years, the company has negotiated the restructuring of these loans, leading to reduced financial pressure. In January 2025, shareholders waived loans amounting to 1.87 billion Riyals, and in September 2025, shareholders approved a capital increase through a private placement. These measures aim to enhance liquidity, reduce the size of accumulated losses, support expansion projects, and improve financial ratios, in line with the requirements of Saudi regulatory authorities. This policy reflects the company's flexibility and responsiveness to changing market conditions.

Petro Rabigh has not announced any cash distributions to shareholders during the years 2024 and 2025. This is primarily due to the high level of accumulated losses, as Saudi regulations require the existence of net operating profits before any dividends can be distributed. The Board of Directors has repeatedly indicated that there is insufficient financial solvency to distribute dividends under current conditions. It is important for investors to understand that the dividend distribution policy is subject to the approval of the General Assembly and depends on the financial results achieved, and any improvement in future results or reduction in accumulated losses may open the door for considering future dividend distributions, but this remains contingent on improved financial and operational performance.

Petro Rabigh's facilities undergo long-term periodic maintenance to ensure safety and operational efficiency. In 2025, maintenance of the olefins cracking unit took about 60 days, temporarily reducing production and negatively impacting financial quarter revenues. Nevertheless, these maintenance activities aim to ensure long-term operational sustainability and reduce the risk of major breakdowns. After completing maintenance, units gradually returned to operation, positively reflecting on production efficiency. It is important to note that such maintenance falls under necessary capital expenditures in the petrochemical industry, which must be considered when analyzing the company's financial results.

Petro Rabigh is highly sensitive to fluctuations in oil, gas, and fuel oil prices, given its reliance on local feedstock for refining and petrochemical operations. In January 2024, rising feedstock prices led to a cost increase of approximately 0.9% of sales costs. Any increase in raw material prices naturally leads to a decline in profit margins, while a decrease in prices or government support can improve profitability. It should be noted that feedstock pricing in Saudi Arabia is often subject to government mechanisms, creating a form of relative stability but not eliminating the risks arising from global market fluctuations.

Petro Rabigh competes with several major companies at the national, Gulf, and global levels, including SABIC, Sadara Chemicals, Yansab, and regional companies like BAPCO in Bahrain. Petro Rabigh stands out due to its integrated facilities between refining and petrochemical production, providing it with flexibility to cope with market fluctuations. Competition is focused on increasing operational efficiency, developing modern products, and adopting environmentally friendly technologies. Aramco's acquisition of a majority stake in Petro Rabigh gives it a financing and stability advantage compared to some competitors, and the transfer of marketing rights to Aramco may expand the company's markets and reduce costs.

Petro Rabigh announced several strategic projects and expansions in 2024-2025. Among the most important is a memorandum of understanding with China's Jiahua to study the establishment of an advanced petrochemical products plant and the development of a fuel oil refining unit. The company also launched a project to recover carbon dioxide from ethylene glycol units, aiming to enhance energy efficiency and reduce emissions. These projects are part of the company's strategy to modernize its facilities, diversify its products, and strengthen its competitive position in the face of global shifts towards clean energy and high-value-added industries.

In recent years, significant shifts in Petro Rabigh's ownership structure have occurred, with Saudi Aramco signing an agreement in August 2024 to acquire a majority stake, followed by an additional acquisition of 22.5% in October 2025. This shift is expected to provide greater financial and operational support for the company, positively impacting financial performance, according to the company's management forecasts. Additionally, the marketing rights for Petro Rabigh's products were transferred from Sumitomo and its affiliates to Aramco and its companies, enhancing supply chain and marketing integration and opening broader avenues for regional and international expansion.

Petro Rabigh faces significant challenges, including fluctuations in oil and gas prices, rising maintenance costs and technical failures, ongoing accumulated losses, and pressures from international competition. Additionally, global shifts towards clean energy require investment in advanced technologies to reduce emissions. Financial risks also include any delays in financial restructuring or capital increases that may negatively affect solvency and stability. Therefore, careful monitoring of these factors is essential when analyzing the stock, considering the company's ability to implement transformation and operational improvement strategies.

From an educational perspective, it can be said that the performance of Petro Rabigh stock in the coming years will primarily depend on the company's success in reducing its accumulated losses, improving operational efficiency, leveraging support and integration with Aramco, and successfully executing developmental projects. Fluctuations in oil prices and legislative and economic conditions remain influential factors on the stock. No definitive future price direction for the stock can be assured, as it depends on the company's ability to achieve tangible financial and operational transformation. It is always advisable to follow the company's disclosures and stay updated on market developments, and to consult a financial specialist before making any decisions.