Petrofarhang CEO stated at the Annual General Meeting:
The best performance in the history of the holding in the fiscal year 1403
The Annual General Meeting of Petrofarhang Holding, which ended in the fiscal year 31 Shahrivar 1403, was held on Sunday, Esfand 19, 1403, under the chairmanship of Abbas Sayadizadeh, Deputy Director of Corporate Affairs and Assemblies, supervised by Ali Fattahi, Deputy Director of Finance and Human Capital, Hassan Mahmoudi, Director of Assemblies Affairs of Farhangian Reserve Fund, and under the secretaryship of Javad Zarepour, CEO of Petrofarhang Holding, and in the presence of Alireza Zeighami and Mohammad Marandi, members of the board of directors of this holding and the managing directors of the subsidiaries, as well as Mohsen Masoudi and Aminollah Salari, members of the board of trustees of the Farhangian Reserve Fund.
Dr. Javad Zarepour, CEO of Petrofarhang Holding, said in a report to the board of directors to this assembly: “In this fiscal year, despite the most problems in the production path of the subsidiary companies due to the gas imbalance in the country, we have recorded the most golden year of production, exports and profitability in the history of the holding company with the aim of creating sustainable wealth for the Farhangian Reserve Fund.” He continued by presenting statistics on the increase in all parameters of Petrofarhang’s profitability and stated: “The 41% growth in production, 30% growth in exports, 410% growth in operating profit and 58% growth in operating income compared to the previous fiscal year indicate that Petrofarhang’s performance has changed significantly, such that with a 300% growth in net profit, it has practically gone from being loss-making to becoming a profitable holding company.” These unparalleled records were achieved in the aforementioned year while the production units of Kimia Pars Middle East and Sabalan faced gas outages for more than 180 days due to imbalance and cold weather, and their production process was halted; otherwise, at least 30 percent would have been added to the production, sales, and profitability records.
Zarepour described the realization of the 100 percent budget in this holding company as the result of a program-oriented plan and stated: Petro Farhang’s targeted and planned efforts in this fiscal year led to the realization of more than the announced plan and budget, such that the net profit plan was achieved by 225 percent and the operating profit by 140 percent, so that with the help of the board of directors and the holding company’s employees, we surpassed the predetermined goals and settled all of the holding company’s debts to the Farhangian Reserve Fund.
He stated: Accelerating and completing the ongoing projects in order to exploit them within the next 2 years, including the Sabalan 2 (Dena) petrochemical and Siraf Energy petrochemical projects, is on the agenda to create an annual production capacity of 3.3 million tons of methanol and practically make Petrofarhang, with a production capacity of 6.6 million tons, one of the largest methanol producers in the world. However, this will not be the ultimate goal of the holding company, and at the same time, the progress of 3 downstream methanol projects will also be followed up so that in the next 3 years, we will witness the transformation of methanol into products with much higher added value and Petrofarhang’s product portfolio will become more diverse.
Zarepour continued to present Petrofarhang’s program in the field of downstream industries of the petrochemical industry and stated: “After years of follow-up, the holding succeeded in obtaining three in-principle approvals for the production of acetic acid, vinyl acetate monomer, and synthetic ethanol at Lavan Chemical Company, the olefin production unit from methanol, polypropylene, acrylic acid, and superabsorbents at Mahtab Parsian Company, and also polyacetyl at Aria Petrochemical Company, in order to have set the most strategic and at the same time the most forward-looking goal for Farhangian’s capital in order to create sustainable wealth.” The CEO and Vice Chairman of the Board of Directors of Petrofarhang said: “We have been pursuing the entry into upstream areas as the first oil and gas holding company in the country related to the Gardan and Pazan fields and finalizing the partnership agreement in this field for the past two years, so that while fulfilling our national duty to confront the imbalance existing in the country, we have practically entered the three upstream, midstream and downstream areas of this industry and for the first time have taken a comprehensive action towards organizational excellence. Also, delivering more than 35 megawatts of electricity to the national grid with two power plants constructed by Mafna Company, starting the implementation operations of the construction of 3 solar power plants and investing in this area with the goal of producing 400 megawatts of clean electricity during a 4-year program are other programs of Petrofarhang to confront the imbalance.” He continued his report by stating: The merger of the Dena project into Sabalan Petrochemical in order to prevent a loss of 3,000 billion tomans to the shareholder, to exit from Article 141 of the Commercial Code, and to downsize and streamline the headquarters in Tehran was the result of months of well-planned planning so that in practice, this important matter could be made possible within just 45 days, which resulted in financing of 2,000 billion tomans and also about 2 times the progress of the project compared to the same period last year.
Referring to financing as the holding’s biggest annual challenge, Zarepour said: In the fiscal year 1403, more than 5,000 billion tomans were provided by the holding in the form of promissory notes, interest-bearing bonds, finance, and other resources to complete the project, which has been unprecedented in previous years.
Referring to the Farhangian Reserve Fund’s emphasis on maximum support for domestic producers and knowledge-based companies, he stated: “In order to strengthen the country’s industrial and economic system and support capable companies, the construction of 30 special process equipment was ordered for the first time in Petrofarhang’s subsidiaries, and tens of millions of euros of foreign exchange were prevented from leaving the country.”
Zarepour described the transparency in the methanol sales process produced in holding companies as one of the most important measures of this fiscal year, adding: For the first time, the centralization of the commercial and sales area in Seko International Trading Company was carried out with the approach of protecting, monitoring, generating income, and improving foreign trade, as well as with the aim of reducing commercial and sales costs by one-fifth of the previous level, in order to prevent any possible encroachment on shareholder capital while providing complete transparency in all stages of sales. Also, the reduction of shipping costs from more than $61 per ton to $55 per ton and the cancellation of all shipping contracts with amounts higher than the budget amount resulted in significant savings for the companies.
At the end of his report, he said: Holding a tender for the construction and completion of the 9-story Sepehr Hotel and concluding a contract with the contractor after an 8-year hiatus and receiving in-principle approval from the Stock Exchange’s Jurisprudential Committee to issue a license to issue bonds worth 2 trillion rials for the first time in the country in the last 4 years can be considered Petrofarhang’s highest step to overcome the biggest risk of the Sepehr Lavan Petrochemical Company; because if the previous situation continued, the demolition of the constructed metal frame was obvious in the near future due to the special climatic conditions of the region and a significant amount of capital from the educational sector would be wasted. In this regard, financing the construction of the Sepehr Hotel worth 3 trillion rials through pre-sale of services with the participation of Sabalan and Kimia companies, as well as starting the project’s implementation operations by deploying the contractor and reviewing the daily plans announced by the holding company, was put on the agenda. Now, with the deployment of the contractor, the hotel’s completion operations are underway.
At the end of this assembly, the financial performance was read by the independent auditor and the legal inspector, and the financial statements for the fiscal year 1403 were approved, and Donyay Eqtesad newspaper was designated as the official newspaper of Petrofarhang Holding.