Saudi Chemanol Reports Major Losses Amid Regional Economic Transformation
Methanol Chemicals Company (Chemanol) has released its interim financial results for the nine-month period ending September 30, 2025, revealing significant challenges that reflect broader regional economic dynamics as Gulf nations navigate global market pressures.
Financial Performance Highlights Regional Challenges
The Saudi-based chemical giant reported a substantial net loss of 510.09 million Saudi Riyals for the nine-month period, compared to 76.94 million SAR in the same period last year. This represents a dramatic increase in losses, highlighting the volatile nature of global chemical markets that affect regional economies.
Revenue declined by 10% to 477.8 million SAR, primarily due to an 8% decline in average selling prices and a 2% reduction in sold quantities. These figures underscore the challenging market conditions facing chemical manufacturers across the Middle East region.
Strategic Restructuring Underway
The company's accumulated losses have reached 577.9 million SAR, representing 85.7% of the company's capital. In response to these challenges, Chemanol's Board of Directors has demonstrated decisive leadership by announcing a comprehensive capital restructuring plan on October 9, 2025.
The company has engaged specialized legal and consulting firms, including Deloitte, to conduct a thorough forensic investigation of previous acquisition deals involving subsidiaries ACC and GCI. This proactive approach reflects the new management's commitment to transparency and accountability.
Market Pressures and External Factors
The financial difficulties stem largely from increased feedstock costs, particularly natural gas prices, which rose significantly at the beginning of the year. This 8% increase in production costs demonstrates how regional energy policies and global market fluctuations directly impact local industries.
The company's challenges were compounded by the underperformance of recently acquired subsidiaries, which recorded combined losses of 30.8 million SAR during the current period.
Forward-Looking Strategy
Management expects to complete a rights issue in the second quarter of 2026, pending regulatory approvals. The company has strategically focused on products with the highest returns, showing a 3% revenue increase in the most recent quarter compared to the previous quarter.
An Extraordinary General Assembly must be convened by February 7, 2026, in accordance with Saudi Companies Law Article 132, to address the company's solvency and determine future strategic direction.
This situation reflects the broader economic transformation occurring across the Gulf region, as traditional industries adapt to new market realities while maintaining their crucial role in regional economic development.