Saudi Arabian Fertilizer stock faces freight pressure after 62% profit drop

Published on 11/10/2026 at 10:51 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Saudi Arabian Fertilizer stock remains exposed to shipping costs after a weak third quarter. A planned urea expansion offers a longer-term growth lever.

Earnings Pressure Meets Expansion

Revenue declined almost 9 percent in the third quarter as transport costs rose and sales volumes weakened.
Urea capacity is planned to increase by 54 percent, but construction, prices and freight remain key risks.
Higher logistics costs are reducing the near-term benefit of fertilizer sales.

Saudi Arabian Fertilizer, SA0007879139, Illustration mit AI erstellt.

Saudi Arabian Fertilizer stock faces near-term margin pressure after Sabic Agri-Nutrients reported a 62 percent year-on-year decline in third-quarter net earnings to SAR 484 million. AGBI published the analysis on October 20, covering the July-to-September period.

Freight Costs Weigh on Earnings

AGBI attributed the decline to lower sales and higher shipping costs amid continuing supply-chain disruption linked to the Strait of Hormuz. Third-quarter revenue fell almost 9 percent year on year, while nine-month profit and revenue declined 37 percent and 14 percent, respectively.

The cost pressure is material for the producer. AGBI cited estimated production costs of 150 to 200 US dollars per tonne, against average third-quarter urea prices of about 420 US dollars per tonne. More expensive export routes therefore leave less room between selling prices and production costs.

Expansion Adds Long-Term Potential

Sabic Agri-Nutrients plans to lift annual urea capacity from 4.8 million to 7.4 million metric tonnes through a new industrial complex in Saudi Arabia. The project could strengthen the company's export platform, but its contribution to earnings will depend on construction progress, fertilizer prices, plant utilization and shipping conditions.

The expansion does not remove the current operating risks. A normalization of regional transport routes would improve sales economics, while prolonged disruption could continue to weigh on margins and volumes before the new capacity becomes available.