Saudi Basic Industries Corporation (SABIC), majority-owned by Saudi Aramco, reported a 62% drop in net profit at 250 million Saudi riyals ($66.65 million), compared to SAR 660 million a year ago.

The decrease in profit was due to lower revenues, decline in results from associates and joint ventures and losses from discontinued operations.

Revenue declined 10% year-on-year (YoY) to SAR 32.69 billion mainly due to a 3% fall in average selling prices and a 7% reduction in sales volumes.

Earnings before financial expenses, zakat, taxes, depreciation and amortisation (EBITDA) reached SAR 4.51 billion in Q1 2024, up 35% from SAR 3.33 billion a year ago.  

“The first quarter of this year has presented global and regional improvement in prices of major petrochemical products mainly driven by demand improvement and logistic disruption,” said CEO Abdulrahman Al-Fageeh. 

“The market has yet to grow into the recent run of capacity investments and this overcapacity continues to place significant pressure on our industry. The gap between excess supply and moderated demand growth is set to remain in place for 2024,” he added.

The company pegged capital expenditure from $4 to $5 billion in 2024.

In December 2023, SABIC’s board approved a dividend payment of SAR 4.8 billion for H2 2023, bringing the total dividend to SAR 10.2 billion for last year.

(Editing by Seban Scaria