One of Saudi Arabia's biggest steel pipe makers saw quarterly sales slump, as shipping disruption cut off the raw materials its factory depends on.
East Pipes Integrated Co. reported revenue of 345 million Riyals, down 34% from 521 million in the previous quarter and 40% lower than a year earlier.
Net profit fell 37% to 78 million Riyals.
What went wrong
Imported hot-rolled steel coil was rerouted from Dammam to Jeddah and Yanbu, adding distance and delays.
Port congestion, higher freight costs and rising insurance premiums added to the strain.
Demand is still there
Acting CEO Dr. Mohamed Saleh Darweesh told Argaam the company sees more than 2 million tonnes of potential demand.
East Pipes has also won new Aramco contracts, including one worth more than 770 million Riyals, or about a third of its annual revenue.
A new way of buying
The company now secures materials project by project, rather than holding three months of inventory, Darweesh told CNBC Arabia.
That reduces risk, but ties up more working capital.
What to watch
Whether production recovers fast enough to deliver on the new Aramco orders.
