First Half 2025 Overview
Key Highlights
- Net profit fell by around 18% in the first half of 2025 compared to the same period in 2024, totaling approximately USD 124.4 million.
- On Tadawul, Luberef’s share price dropped nearly 3–4%, with intraday declines of about 3% and session lows nearing 10%, making it one of the worst-performing stocks on the Saudi market on the reporting day.
Underlying Causes of Decline
- The profit decline stemmed primarily from lower crack margins on by-products and reduced sales volumes in both base oil and by-products segments, though base oil crack margins did show slight improvement.
- Revenue for H1 contracted modestly, in line with the trend seen in Q1 2025, where revenue fell by approximately 2.5% year-on-year.
Financial Metrics & Strategic Moves
- The first quarter of 2025 saw net income of SAR 221.5 million, down from SAR 239.0 million in Q1 2024, a decline of about 7.3%. Earnings per share decreased to SAR 1.32 from 1.42. Revenue dropped by 2.6%, gross profit by about 8.4%, and operating profit by 8% year-over-year.
- For H1 2025, Luberef’s board approved a 10% cash dividend distribution, equivalent to SAR 1 per share, with a total payout of SAR 168 million. The dividend record date is set for October 1, 2025, with payment expected on October 15.
Market Context & Broader Implications
- The broader Gulf market indices fell on August 4, 2025, with Luberef’s performance contributing significantly to the decline.
- The downturn reflects a challenging macroeconomic environment, lower cracks in refined products, sluggish demand trends, and cost inflation weighing on margins in the chemicals and energy sector.
Summary Table
| Metric | H1 2025 Result | Comparison to H1 2024 |
|---|---|---|
| Net Profit | ≈ USD 124.4 million | −18% y‑o‑y |
| Q1 Net Profit (SAR) | SAR 221.5 million | Down ~7% |
| Q1 Revenue / Sales | SAR 2,128 million | Down ~2.6% |
| Dividend (H1 2025) | SAR 1.00/share | 10% of capital |
Strategic and Investor Implications
Margin pressure is the predominant risk as global base oil markets face oversupply and volatile by-product pricing.
- Dividends remain stable, highlighting confidence in the underlying cash flow, though reduced net profit reflects caution.
- Share price volatility may persist, hinging on future crack spreads and global demand recovery in lubricants and base oils.
In summary, Luberef delivered its half-year earnings on August 3, 2025, revealing a substantial drop in net profit largely caused by weaker margins and lower output. While the company maintained its dividend policy, the results indicate underlying stress in the base oil business amid broader industrial headwinds.