yansab: A Comprehensive Overview of Yanbu National Petrochemicals

Yanbu National Petrochemicals Company (yansab) was established in 1999 as part of a strategic partnership between two of the largest industrial entities in the Kingdom: Saudi Basic Industries Corporation (SABIC) and Saudi Aramco. The company is headquartered in Yanbu Industrial City, a massive industrial area on the western coast of the Kingdom that serves as a hub for the production and export of petrochemical products. Through this partnership, yansab has benefited from the technical, managerial, and technological expertise of SABIC and Aramco, allowing it to build advanced industrial complexes primarily relying on natural gas and ethane as key feedstocks. Over the years, the company has evolved from a local producer to a regional and international player in the petrochemical market, possessing high export capabilities and product diversity. yansab focuses on enhancing the added value of Saudi oil by converting it into products used in various manufacturing industries, such as packaging, automotive, textiles, and construction. Strong governance and commitment to global industrial standards are part of the company's operational philosophy, contributing to its growth and stability over the past decades.

The institutional stability of yansab is reflected in its ownership structure, dominated by two of the largest industrial entities in the Kingdom: SABIC (62%) and Saudi Aramco (approximately 38%). This situation places yansab under high-level institutional management, where strategic and operational decision-making is coordinated between these two industrial giants. The company's board of directors comprises members with extensive experience in petrochemical industries, financial management, and technology, ensuring close monitoring of operational and financial performance. The board is also subject to the transparency and disclosure standards imposed by the Saudi Stock Exchange (Tadawul) and the Capital Market Authority. The management structure relies on specialized teams in production, marketing, risk management, and innovation, enhancing the company's ability to face challenges and adapt to rapid market changes. Additionally, partnerships with global companies are part of yansab's strategy to adopt the latest technologies, especially in its industrial complexes in Yanbu.

yansab focuses on producing a diverse range of essential petrochemical products that form the backbone of numerous industries. Its most notable products include ethylene, polyethylene, propylene, monoethylene glycol (MEG), as well as alkenes and plasticizers.

Production operations are distributed across three main industrial complexes in Yanbu (Nakhil 1, 2, 3), equipped with the latest global technologies and managed in collaboration with international partners. The combined annual production capacity reaches hundreds of thousands of tons of ethylene and polyethylene, along with significant quantities of MEG, supporting the needs of the packaging, construction, textiles, and agricultural industries.

yansab's products are characterized by high quality and meet the standards of both local and global markets. The company also provides auxiliary products such as chemical catalysts and plasticizers to enhance the properties of plastics, enabling it to expand into diverse markets and offer advanced industrial solutions.

In 2024, yansab witnessed a significant improvement in its financial performance, following a challenging year in 2023 where it incurred substantial losses due to declining profit margins and reduced global demand. The company recorded a net profit of SAR 420.3 million in 2024, compared to losses of SAR 485.1 million in the previous year.

This turnaround resulted from several factors, notably the recovery of global petrochemical prices, increased operational efficiency in the company's plants, and improved demand for plastics and plasticizers.

However, the company faced some quarterly fluctuations, recording a loss of approximately SAR 34.6 million in the fourth quarter of 2024. Nonetheless, the profits achieved in the first, second, and third quarters compensated for these quarterly losses, resulting in a positive annual outcome. This performance reflects yansab's ability to control costs and enhance operational efficiency, despite external challenges such as fluctuations in oil and gas prices and raw material costs.

yansab's stock trades on the Saudi Stock Exchange under the symbol 2290 and is considered one of the leading stocks in the petrochemical sector. The stock price in early 2025 was approximately SAR 26.5. Based on the number of outstanding shares (1.165 billion shares), the company's market capitalization is estimated at around SAR 30.6 billion.

The price-to-earnings (P/E) ratio is estimated at around 73 based on the approximate earnings per share for 2024 (SAR 0.36 per share), which is relatively high due to the recent recovery from losses. It is worth noting that the P/E ratio fluctuates continuously based on market expectations for future earnings.

Regarding distributions, yansab did not announce cash dividends in 2023 due to losses, but with the return to profitability in 2024, the company may consider distributing part of the profits in the future, depending on the general assembly's decision and investment needs.

The petrochemical sector is one of the vital sectors in the Saudi economy, as the Kingdom relies on converting oil and gas into high-value products that contribute to diversifying national income sources. yansab benefits from the availability of raw materials at competitive prices, in addition to government support and the national strategic vision 2030 that encourages manufacturing industries.

Within the sector, yansab faces competition from major companies such as SABIC, its subsidiaries (like KIPCO), Tasnee, and large private companies. It also competes with joint ventures of Aramco and global companies. yansab's integration with SABIC and Aramco gives it flexibility in securing raw materials, along with technical and managerial support.

The company seeks to maintain its position through innovation, developing new products, increasing operational efficiency, and investing in expansion projects to improve market share and face international competition.

yansab's results are influenced by several internal and external factors, most notably fluctuations in oil and gas prices, as these are essential raw materials in production processes. Global demand for petrochemicals also plays a pivotal role in determining profit margins. In 2023, rising gas prices and declining demand led to significant losses, while price stability in 2024 contributed to improved financial performance.

Logistical factors such as shipping costs and supply chains also affect product costs and the company's ability to compete in global markets. Additionally, environmental regulations and the trend towards recycling present both challenges and opportunities, requiring investments in clean production technologies and emissions reduction.

yansab relies on risk management strategies, including product diversification, hedging against price fluctuations, and investing in regular maintenance and improving plant efficiency.

The financial results for the fourth quarter of 2024 showed the company recording a quarterly loss of approximately SAR 34.6 million, despite strong profits in previous quarters. The company attributed this to a temporary decline in product prices and an increase in some operational costs. However, the annual performance remained positive.

Reports indicate that the company is exploring opportunities to expand production capacities, especially in the fields of methylene and high-tech plastics, in line with the growing demand for advanced products. The company has not announced specific environmental projects yet, but it is expected to move towards sustainability initiatives and a shift towards a circular economy in the coming years, in line with the Kingdom's Vision 2030.

On the management front, no significant changes have occurred in the board of directors or organizational structure as of early 2025, indicating administrative stability.

yansab's dividend distribution policy is based on its annual financial results and the investment strategy of the board of directors. In years when the company incurs losses, such as 2023, cash distributions are typically halted. However, in the event of profitability, as in 2024, the board is expected to discuss the possibility of distributing part of the profits to shareholders, considering capital needs and expansion plans.

Distributions are usually announced after the annual general assembly's approval and are determined based on the board's recommendation. It is important to monitor the company's official announcements to understand future policies, as they may change according to market conditions and investment needs. Through this policy, the company aims to achieve a balance between rewarding shareholders and enhancing business growth.

yansab aims to enhance its future growth by investing in modern technologies and expanding production lines, especially for high-value-added products such as engineering polymers and recyclable products. The company is exploring options to increase the production capacity of its plants in Yanbu and develop new products that meet the requirements of global and local markets.

In addition to industrial expansion, the company prioritizes environmental sustainability by reducing gas emissions, utilizing renewable energy, and developing circular economy initiatives. This aligns with its commitment to the Kingdom's Vision 2030, which encourages a shift towards clean and environmentally friendly industries.

The company relies on innovation and international partnerships to transfer modern technologies, enhancing its competitiveness in a market increasingly subject to environmental regulations.

yansab is directly affected by changes in the global economy, particularly oil and gas prices and international trade policies. During 2022-2023, fluctuations in energy prices and a slowdown in the global economy led to a decline in demand for petrochemical products, impacting the company's profitability. Conversely, the recovery in demand and stabilization of oil prices in 2024 contributed to improving the company's results.

The company is also subject to competition from global petrochemical companies, in addition to increasing regulatory pressures regarding environmental sustainability. yansab responds to these challenges by improving efficiency, diversifying products, and adopting less energy-intensive production technologies.

This adaptability reflects the company's resilience and ability to capitalize on emerging opportunities in global markets.

yansab is a key element in the Kingdom's strategy to diversify national income sources and reduce dependence on crude oil as the sole source of revenue. By converting petroleum materials into high-value petrochemical products, the company contributes to job creation, enhances non-oil exports, and develops manufacturing industries within Saudi Arabia.

yansab is viewed as one of the successful models in implementing the Kingdom's Vision 2030, through investing in advanced technologies, localizing industrial knowledge, and expanding the value-added chain of petrochemical industries. The company also contributes to building partnerships with educational and research institutions to develop national competencies and support innovation in the industrial sector.

yansab is committed to the disclosure and transparency standards imposed by the Saudi Stock Exchange and the Capital Market Authority. The company publishes quarterly and annual financial reports that include details of financial performance, investments, and expansion plans. Its reports also clarify governance policies, risk management strategies, and internal control tools.

This transparency allows investors and financial analysts to monitor performance and assess risks objectively. The company is also committed to disclosing significant events, such as changes in management or the declaration of dividends, through official communication channels. This commitment is one of the factors that enhance investor confidence and support the stability of the stock price in the market.

You can monitor yansab's stock performance through its official page on the Saudi Tadawul platform (Stock Page: /stocks/2290/). The page provides live data on the stock price, market capitalization, P/E ratio, dividends, as well as quarterly and annual financial reports.

For a comprehensive view, it is advisable to review the annual reports issued by the company, as they include detailed analyses of operational performance, investments, risks, and future growth strategies. You can also benefit from reports by specialized financial analysts and compare yansab's performance with similar companies in the sector.

It is important to emphasize that financial data not only reflects past results but also provides important indicators about the company's future trends.