- Saudi Basic Industries Corporation (SABIC), a global leader in petrochemicals, disclosed a significant 62% decrease in first-quarter net profit, attributing the decline partly to reduced revenue. The company reported a net profit of 250 million riyals ($66.66 million) for the period ending March 31, down from 660 million riyals in the same quarter last year, falling short of the mean estimate of 440 million riyals based on LSEG data.
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The downturn in net profit was primarily linked to decreased revenues, lower results from associates and joint ventures, and losses from discontinued operations, according to SABIC's statement. Quarterly revenue stood at 32.7 billion riyals, marking a 10.3% decline year-on-year, primarily driven by a 3% reduction in average selling prices and a 7% decrease in sales quantities. SABIC's CEO, Abdulrahman Al-Fageeh, acknowledged improvements in global and regional petrochemical product prices but highlighted persistent challenges stemming from industry overcapacity. Despite market improvements, the company anticipates continued pressure from excess supply compared to moderated demand growth throughout 2024.
Why it matters
SABIC emphasized its commitment to a disciplined approach in managing capital expenditure (CAPEX), projecting a spending range of $4 to $5 billion for the year 2024.
