Saudi Arabia’s Kian Company Reports Mounting Losses, Approaching Half of Capital
Saudi Kayan Petrochemical Company is facing deepening financial difficulties, with accumulated losses nearing half of its capital, according to recent reports. The company’s struggles highlight the challenges facing the petrochemical sector in Saudi Arabia, stemming from a combination of declining product prices, rising input costs, and broader economic headwinds.
As of September 30, 2025, Saudi Kayan’s accumulated losses totaled SAR 5.83 billion, representing 38.90% of its SAR 15 billion capital, . This figure has continued to climb, with losses widening to SAR 1.27 billion in the first half of , up from SAR 821.95 million during the same period in . The company reported a net loss of SAR 496.35 million in the second quarter of , an improvement from the SAR 775.78 million loss in the first quarter, but still a significant shortfall.
Recent financial results for show a net loss of SAR 2.2939 billion, with the fourth quarter alone accounting for SAR 685.5 million in losses. These losses are largely attributed to lower revenues, despite increased sales volumes, due to a decline in average selling prices. The company also noted that it received SAR 106 million in insurance compensation related to a bisphenol plant incident during the current period, compared to SAR 177 million in the first nine months of .
The company’s share price has suffered as a result of these financial woes. Over the past five years, the share price has dropped 68%, and it has declined 31% over the past year. More recently, the share price has fallen 18% in the last 90 days. According to Sahm Capital, the stock has experienced a loss of 11% over the last half decade.
Saudi Kayan’s revenue has also been in decline, shrinking by 4.2% per year over the last five years. While revenue rose 5.2% year-on-year to SAR 4.29 billion in the first half of , this increase was not enough to offset the impact of rising costs and falling prices. Gross and operational losses nearly doubled during this period.
The company attributes its difficulties to a number of factors, including unfavorable pricing conditions, higher raw material costs, and slower global economic growth. Input cost pressures continue to be a primary drag on margins. The company has been implementing a transformation strategy aimed at long-term cost and efficiency improvements, but the benefits of these efforts have yet to fully materialize.
In an effort to improve its financial position, Saudi Kayan refinanced SAR 8.1 billion in Islamic Murabaha loans with several local banks on . This refinancing aims to maximize cash liquidity, strengthen the company’s financial position, and increase financial flexibility. It is also expected to improve solvency and enhance shareholder returns.
As of June 30, , shareholders’ equity had fallen 18.2% year-on-year to SAR 10.24 billion. Loss per share was SAR 0.85, versus SAR 0.55 in the first half of . Accumulated losses reached 35.59% of the company’s capital by , triggering regulations applicable to listed firms with accumulated losses exceeding 20% of capital.
Despite the challenges, Saudi Kayan continues to focus on improving production efficiency and cutting costs through approved initiatives and programs. The company believes that a pick-up in revenue could lead to a recovery in its share price, but acknowledges that it is currently losing money and revenue is moving in the wrong direction. The company’s future performance will likely depend on its ability to navigate the challenging market conditions and successfully implement its transformation strategy.
The situation at Saudi Kayan serves as a cautionary tale for investors in the petrochemical sector, highlighting the risks associated with cyclical industries and the importance of careful financial management. The company’s struggles also underscore the broader economic challenges facing Saudi Arabia, as it seeks to diversify its economy away from oil.