Saudi Basic Industries posts 62% slump in quarterly profit

Riyadh — Saudi Basic Industries Corporation (Sabic), one of the world’s biggest petrochemical companies, reported a 62% drop in first-quarter net profit on Wednesday, which it partially attributed to a decline in revenue.

Sabic reported net profit of 250-million riyals ($66.66m) for the three months to March 31, down from 660-million riyals a year earlier, and missed a mean estimate of 440-million riyals, based on LSEG data.

“The decrease in net profit is attributed to lower revenues, lower results from associates and joint ventures in addition to losses from discontinued operations,” Sabic said. One of its largest joint ventures is Sinopec-Sabic Tianjin Petrochemical Company.

The company reported quarterly revenue of 32.7-billion riyals, down 10.3% year on year, which it said was due to a decline in the average selling prices by 3% and reduction in sales quantities by 7%.

“The first quarter of this year has presented global and regional improvement in prices of major petrochemical products mainly driven by demand improvement and logistic disruption,” said CEO Abdulrahman Al-Fageeh. He was appointed chief in 2023.

“The market has yet to grow into the recent run of capacity investments and this overcapacity continues to place significant pressure on our industry. The gap between excess supply and moderated demand growth is set to remain in place for 2024.”

Sabic said it would maintain a “disciplined approach” in managing its capital expenditure, and is projecting a spending range of $4bn to $5bn for 2024.

On a quarterly basis, revenue fell 7% from the fourth quarter of 2023, on lower sales and higher selling prices.

It had a net loss of 2.77-billion riyals in 2023, due to discontinued operations. With Staff Writer

Reuters