Saudi Fertilizers Co (Safco) said its net profit fell sharply in the second quarter on lower global prices but its stock closed up after the firm gave a dividend that was higher than its earnings per share. Safco made a net profit of SR480 million ($128 million) in the three months to June 30, which is 60 percent below the SR1.19 billion it made a year earlier, it said in a statement on the bourse website. “The decline in second quarter (earnings) ... is due to the decrease in international prices,” said Safco, which produces urea and ammonia. Dubai-based Shuaa Capital said Safco's earnings boded ill for the earnings of fertilizer units of Industries Qatar and remaining fertilizer operations of Saudi Basic Industries Corp, Safco's top shareholder. Compared to their level a year earlier, Middle East granular urea prices in the second quarter were on average 57 percent lower, while average Arabian Gulf prices of ammonia were 51 percent down, Shuaa said. Operating profit in the second quarter was SR438 million, down 59 percent compared to the year-earlier period, Safco said. Shuaa said this indicated that the company has kept costs under control. Safco said it would give shareholders a SR5 dividend for the first half of 2009 against SR4.02 earnings per share the firm generated during the same period. This will yield SABIC SR536.3 million based on its 42.9 percent holding in Safco. Safco's stock closed 3.33 percent higher. Meanwhile, Dar Al-Arkan Real Estate Development Co, Saudi Arabia's largest developer by market value, said second-quarter profit fell 10.1 percent after a drop in sales of housing units. Second quarter earnings amounted to SR618.3 million ($164.9 million), the company said in a statement on the bourse website. Operating profit fell by 14.6 percent to SR668.2 million, the firm said. Earnings per share were SR0.97 in the first six months after 1.06 riyals in the same period a year ago. It did not give quarterly share earnings. Moreover, Saudi Industrial Investment Group or SIIG, said Saturday its first-half net profit plunged 92.2 percent to SR22.9 million ($6.12 million) from SR295 million a year earlier. The decline in profits was due to accumulated losses from the first quarter.
