Sabic posts near 4% rise in Q2 net profit

The petrochemicals company attributes the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses



A man walks past the headquarters of Saudi Basic Industries Corp (Sabic) in Riyadh. — Reuters file photo
A man walks past the headquarters of Saudi Basic Industries Corp (Sabic) in Riyadh. — Reuters file photo

By Reuters

Published: Tue 9 Aug 2022, 5:40 PM

Last updated: Tue 9 Aug 2022, 5:41 PM

Saudi Basic Industries Corp (Sabic) said on Tuesday that it expects margins to be under pressure in the second half of 2022, due to a slowdown in global growth, lockdowns in China, conflict in Europe and continued supply chain challenges.

The guidance from the world’s fourth-biggest petrochemicals firm by sales and asset value came as it reported an almost four per cent rise in second-quarter net profit.

Sabic achieved a net profit of SR7.93 billion ($2.11 billion) for the three months to June 30, up from SR7.64 billion a year earlier, the company said in a bourse statement.

That beat the SR6.16 billion mean forecast of seven analysts, Refinitv data showed.

It attributed the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses.

Sales rose 32 per cent to SR55.98 billion, exceeding an analysts’ forecast of SR53.78 billion.

Average selling prices rose 22 per cent and were up three per cent from the first quarter, Sabic said in its earnings presentation. Sales volumes increased 10 per cent year on year and three per cent quarter on quarter.

The company said profits were also buoyed by an increase in its share of results of associates and joint ventures.

Sabic said it expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be flat this year with higher sales volumes offsetting high feedstock prices.

Oil giant Saudi Aramco owns 70 per cent of Sabic. — Reuters


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