Riyadh – Mubasher: Methanol Chemicals Company (Chemanol) has announced its annual financial results for the fiscal year ending 31 December 2025, revealing a significant widening of net losses and a precarious financial position.
The company’s net loss attributable to shareholders climbed to SAR 479.66 million, a 72.17% increase from the SAR 278.59 million loss reported in the previous year. This downturn has pushed accumulated losses to SAR 551.30 million, representing 82% of the company’s capital and triggering regulatory requirements under Saudi Companies Law.
The company’s financial performance was pressured by a combination of deteriorating market conditions and substantial non-cash impairment charges. Annual revenues fell by 11.85% to SAR 621.93 million, down from SAR 705.57 million in 2024.
Management attributed this decline to a 10 percent drop in average selling prices and a 2% decrease in sales volumes. Furthermore, rising feedstock costs for natural gas at the beginning of the year exacerbated production expenses, leading to a consolidated operating loss of SAR 500.66 million.
The parent company, Chemanol, accounted for SAR 162.20 million of the total operating loss. However, the most significant impact on the bottom line stemmed from the company’s subsidiaries, Addar Chemicals Company and Global Company for Chemical Industries Ltd.
These entities contributed 66 percent of the group’s total net loss, or SAR 317.50 million. This figure includes SAR 280.40 million in asset impairment losses recorded during the second quarter of 2025 following an evaluation of recoverable amounts.
Chemanol’s balance sheet reflects the severity of the situation, with total equity (excluding non-controlling interests) dropping 62.59 percent to SAR 285.21 million.
The independent auditor’s report included a material uncertainty paragraph regarding the group’s ability to continue as a going concern. As of year-end 2025, the group’s current liabilities exceeded its current assets by SAR 329.97 million.
The auditor also highlighted that the group is involved in ongoing legal proceedings and that its survival is contingent upon the successful implementation of a capital restructuring plan, including a planned rights issue.
In response to the losses associated with the acquisition of its two subsidiaries, which occurred under a previous board of directors, the current board has initiated legal action.
Following a financial forensic investigation conducted by Deloitte, the company has appointed a specialized law firm to study its legal position. Legal proceedings have already been launched against certain officials responsible for these acquisitions, with further actions planned against former board members with executive authorities.
To address the capital erosion, Chemanol has moved forward with a restructuring plan. Following a formal notification of the loss threshold on 10 August 2025, the company submitted a capital reduction file to the Capital Market Authority (CMA).
The CMA granted approval for the capital reduction on 7 May 2026. Consequently, the company has called for an Extraordinary General Assembly (EGM) to be held on July 14, 2026, to vote on the capital reduction and discuss the company’s solvency and continuity.
