PARIS, France - Saudi Basic Industries Corp (SABIC), one of the world’s leading petrochemical companies, reported a sharp fall in its net profit for the first quarter of 2023, as it faced lower sales prices and volumes amid weak global demand.
The company recorded a net income of 660 million riyals ($176 million) for the three months ending March 31, a 90% drop from 6.47 billion riyals ($1.7 billion) in the same period last year .
SABIC blamed the slump on “pressure on global sales prices” and “new capacities in Q1 2023” that increased competition and reduced margins . The company also said it had “limited relief on variable cost” and faced “high inflation and interest rates” that added to the uncertainty of global demand growth.
SABIC’s CEO Abdulrahman Al-Fageeh said the company was closely monitoring the changes and the recovery of the global market demand and was committed to deliver on growth, innovation and sustainability despite market uncertainties.
He also said the Shareek programme, announced in 2021, would play a key role in the next growth phase of SABIC. The programme is meant to see SABIC and oil giant Aramco, which owns 70% of SABIC, leading $1.3 trillion in investments in the private sector through 2030, part of broader plans to diversify the economy away from oil.
SABIC said it expected margins to remain under pressure in the second quarter of 2023, as it projects global economic growth to average 2.1% this year.
The company’s revenue for the first quarter reached 39.69 billion riyals ($10.6 billion), slightly lower than 40.09 billion riyals ($10.7 billion) in the same quarter last year.
SABIC is one of the most diversified petrochemical companies in the world, producing chemicals, polymers, fertilizers, metals, and other products. It operates in more than 50 countries and has more than 33,000 employees.
Comments