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Saudi chemical giant records rare loss as prices sag

Filed on January 29, 2020
Saudi chemical giant records rare loss as prices sag

(Reuters)

Saudi petrochemicals giant Sabic said on Wednesday it posted a rare loss in the fourth quarter of last year, due to low prices and the allocation of a huge emergency provision.

Sabic, the second-largest listed firm in the kingdom after oil giant Aramco, said it posted a loss of $192 million in the last three months of 2019 after its revenues fell by 18.5 per cent.

The company, in which Aramco acquired a 70 per cent stake for $69 billion last year, said it has also made a $747 million impairment provision in support of one of its affiliates which is undergoing restructuring.

Sabic posted a profit of $859 million in the fourth quarter of 2018.

"Despite an uptick in Brent oil prices in the fourth quarter, the results were negatively impacted by a further decline in petrochemical prices driven by oversupply in the key products and slowing global growth coupled with seasonal impacts," the company said in a statement.

For the whole of 2019, Sabic net profit dropped a massive 74 per cent, the company said, also citing lower prices and allocation of emergency provisions.

The company said it posted a net profit of $1.5 billion in 2019 compared to $5.74 billion in the previous year.

Its revenues dropped almost 19 per cent to $32.5 billion last year from $40.1 billion in 2018.

"The petrochemical industry was negatively impacted in 2019 by additional new supply in key products coming on-stream coupled with a moderation in global growth compared to 2018," Sabic CEO Yousef Abdullah al-Benyan said in a statement.

- AFP


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