SABIC (2010) saw its net quarterly profits reach SAR 1 billion, compared to losses of approximately SAR 3 billion last year, thanks to the sale of its steel unit.
However, this was below analysts’ estimates of SAR 1.6 billion.
Details
SABIC’s CEO, Abdulrahman Al-Fageeh, stated in a press conference that the growth in the last three months was due to improvements in the average selling prices of its key materials, boosting sales.
He noted, however, that the surplus production from petrochemicals is still “negatively affecting” the market.
Al-Fageeh also mentioned that current operating rates are below long-term averages.
Revenues for the current quarter for the largest producer of petrochemicals and fertilizers in the Middle East increased by 3% compared to the third quarter of the previous year, reaching nearly SAR 37 billion.
This was primarily due to an increase in average selling prices, despite a slight decline in quantities sold.
So what
Producers of petrochemicals in Europe and Asia have faced increased production capacity in the Chinese market in recent years, alongside rising energy costs in Europe.
This has led to shrinking margins and forced companies to merge.
On the other hand, Al-Fageeh mentioned that geopolitical tensions in the Middle East and Europe have impacted the industry overall, but he confirmed that SABIC’s operations have not been affected during the past two years by these tensions.
He added that the company continues to maintain a stable profit margin before accounting for costs, interest, taxes, depreciation, and amortization.
SABIC, of which Aramco owns 70%, revealed in August that its long-term focus will remain on enhancing its portfolio and restructuring assets.
Some Context
SABIC returned to profitability in the first nine months of the current year, reporting around SAR 3.4 billion, compared to net losses of about SAR 1 billion during the same period last year.
Earnings per share increased to SAR 1.14, compared to a loss of SAR 0.35 during the same period last year.
