The report said that SKPC benefited from a rally in global polyethylene prices during the first half (H1) of 2018, as new plants in the US were slow to start, resulting in a supply gap.
The report also noted that SKPC experienced some pressure on margins throughout 2018, with gross margins contracting from 30% in the first quarter (Q1) to 23% in the Q3.
If the strain on margins persist, it could warrant another downgrade to SKPC. We assume a stable feedstock cost of $7.25/mmBtu over our forecast horizon, with margin pressure in the next two years coming mainly from the expected decline in polyethylene prices."
Meanwhile, the report said that the lack of significant developments and the prolonged announcement of further details regarding SKPC's new polypropylene project has forced them to exclude the project from their fair value (FV) for the time being.
"We remain sceptical that SKPC will be able to own 100% of the $1.2bn plant, as it would result in a massive shift in the company's capital structure and will require a capital increase, if not multiple, given the company's commitment to pay dividends.
R v Bruno, 2001 BCSC 1828 at para 7, 55 WCD (2d) 26; R v Bruno, 2002 BCCA 348 at paras 6-7, 54 WCB (2d) 248 [Bruno #2]; R v Fehr, 2002 SKPC
8 at paras 4-6, 10-12, 18, 224 Sask R 132 [Fehr]; R v Gibbs, 2006 BCSC 481 at paras 22, 54, 69, 2006 DTC 6212 [Gibbs]; R v Maleki, 2006 ONCJ 401,  1 CTC 212 [Maleki]; R v Eckhoff, 2006 SKQB 500 at paras 20-21,  2 CTC 26 [Eckhoff]; Iwanow v Canada, 2008 TCC 22 at paras 18-21, 2008 DTC 2506.
(123) See e.g., R v Gambler, 2012 SKPC 60, 2012 CarswellSask 264; R v Cbildforever, 2014 ONSC 1067 (SCJ); R v Green, 2013 ONCJ 423, 2013 CarswellOnt 10710; R v Tororak, 2013 CarswellNfld 391 (Prov Ct); R v Cotton, 2013 NWTSC 41,2013 CarswellNWT 47.
(213) For instance, in the decision of R v Engel, 2013 SKPC 215, 2013 CatswellSask 924, there ate practically no details mentioned as to the "Gladue factors", although the expression "Gladue factot" is listed as one of the mitigating circumstances applicable in the matter.
The holding company justified its decision to halt gas supplies under the pretext of periodic maintenance needed for the company that supplies gas to SKPC.
It would create losses, hurt the plastics sector and cause the collapse of small and medium-sized factories, as SKPC supplies raw polyethylene for roughly 70% of plastic factories in Egypt, he added.
(97) Voir Bloor Italian Gifts, supra note 51; Kumar v Picco, 2007 BCSC 1669, 37 CBR (5e) 29 [Kumar]; Robertson v Stevenson Accounting Ltd, 2011 SKPC
112, 380 Sask R 120 [Robertson],
Eckel, "the defence of necessity has been found to excuse the commission of strict liability provincial statutory offences" (2007 SKPC
78 at para 16, 298 Sask R 197 [Eckel]).