Distribution of dividends to shareholders at 1.5 riyals per share for first half of the year

Riyadh, 17 July, 2006. The Saudi Basic Industries Corporation (SABIC) reported a net profit of SR 4.6 billion in the second quarter 2006. The total profits generated in the first half of 2006 amount to SR 8.8 billion compared to SR 9.8 billion in the same period last year.

Mohamed Al-Mady, SABIC Vice Chairman & CEO said, "SABIC's profits in the second quarter 2006 exceeded the profits reported in the first quarter 2006 by 9 percent. This is due to an increase in the quantity of sales and an improvement of prices, in spite of the substantial negative impact of the rise in the prices of liquid raw materials and iron ore, which led to the reduction in the profits of the first half of this year by 22 percent.

"The quantity of production for the first half of 2006 is approximately 23.5 million tons, compared with 22.5 million tons for the same period of the previous year.  The quantities sold amount to 18.8 million metric tons compared to 17.3 million metric tons for the same period of the previous year, generating an income of SR 40.2 billion compared to 37.1 billion riyals for the same period last year.

"The SABIC Board of Directors, under the chairmanship of His Highness Prince Saud bin Abdallah bin Thunayan Al-Saud, has approved the distribution of semi-annual cash dividends amounting to 3.75 billion riyals at 1.5 riyal per share (representing 15 percent of the corporate capital). The date of profit eligibility will be for the owners of the company's shares registered in the records of the Securities Deposit Center at the end of trading on Monday, July 31, 2006. The company will start payment after three weeks from the date of eligibility.

"The second quarter of the current year has witnessed the commissioning operations of SAFCO Project IV, a second Ethylene Glycol plant at the UNITED affiliate, and the long steel products plant within the HADEED affiliate. SABIC is moving ahead with the implementation of its expansion plans to reach a total annual capacity of more than 64 million metric tons over the next two years and reach 100 million metric tons in 2015. In this regard, we have initiated the implementation steps for the YANSAB affiliate in Yanbu Industrial City with an annual capacity exceeding 4 million metric tons of petrochemical products.  In addition, the SAUDI KAYAN affiliate, which adds a similar capacity in addition to the SHARQ pilot expansion project with an annual capacity exceeding 2.8 million metric tons".    

Al-Mady went on further to say, "The company launched the issuance of Sukuk of up to 3 billion riyals as part of its efforts to diversify the sources of financing its industrial projects. The work is on schedule and is proceeding in accordance with the objectives set out in the SABIC 2020 Strategic Planning Project, a pilot project which reflects SABIC's leadership aspirations."

-Ends-

NOTES TO EDITORS:
Saudi Basic Industries Corporation (SABIC) is the largest public company in the Middle East, ranked by market capitalization (more than US$ 150 billion), and one of the world's 10 largest petrochemicals manufacturers. The company is among the world's market leaders in the production of polyethylene, polypropylene, glycols, methanol, MTBE and fertilizers as well as the fourth largest polymer producer.

SABIC's profit rose to a record SR 19.2 billion (US$ 5.1 billion) in 2005, a 35% increase on 2004 and the company's highest profit since inception. Sales revenues for 2005 totaled SR 78.3 billion (US$ 20.8 billion), making SABIC the largest and most profitable public company in the Middle East.

SABIC operates six interlinked strategic business units: Basic Chemicals, Intermediates, Polyolefins, PVC and Polyester, Fertilizers and Metals.  The company has significant research resources and has dedicated Research and Technology centers in Riyadh, Geleen in the Netherlands, Houston USA and Vadodara in India.  SABIC has more than 17,000 employees worldwide.

SABIC has two large production sites in Saudi Arabia - in Al-Jubail and in Yanbu - comprising 18 world-scale complexes.  Some of these complexes are operated with multi-national joint venture partners such as Exxon Mobil, Shell and Mitsubishi Chemicals. SABIC's overall production capacity has increased from 35.4 million metric tons in 2001 to 46.7 million metric tons of production in 2005.

Headquartered in Riyadh, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70% of SABIC shares with the remaining 30% held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

SABIC Europe, headquartered in Sittard, the Netherlands, employs nearly 2,450 people and operates two petrochemical production sites in Geleen, the Netherlands and Gelsenkirchen in Germany for the production of polypropylenes, polyethylenes and liquid hydrocarbons. These are marketed by its European network of sales offices and logistical hubs. In 2005, SABIC Europe produced 2.5 million metric tons of polyolefins and 3.1 million metric tons of basic chemicals, mainly for the European market.

Othman Al-Humaidi
General Manager,
Corporate Communications

© Press Release 2006