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Petrochemicals giant Saudi Basic Industries Corporation (SABIC) on Thursday said it made 4.93 billion riyals ($1.32 billion) in net profit for the fourth quarter 2021, more than double its year-ago effort due mainly to higher selling prices and volumes.
On a sequential quarter basis, the profit was 12 percent lower compared with a net income of 5.59 billion riyals it made in the period ended September 2021.
Analysts on average expected the Q4 profit to hit 5.5 billion riyals, according to Refinitiv data.
Revenue came in at 51.28 billion riyals, a 56 percent increase year-over-year (y-o-y).
Q4 net profit was also impacted by an increase in financial charges mainly driven by the re-measurement of derivatives equity instruments for the forward contracts related to certain joint venture agreements by 0.59 billion riyals, the company said in a statement on Tadawul.
EBITDA at 13.05 billion riyals is 95 percent higher y-o-y.
Yousef Abdullah Al-Benyan, Vice Chairman and Chief Executive Officer, said the results were driven higher prices for most of its key products. "This led to higher EBITDA during the fourth quarter of 2021,” he said.
For 2022, SABIC said it expects higher incremental sales volumes due to transfer of the sales and marketing rights of chemicals and polymers products from Saudi Aramco to SABIC, starting up new assets and continuous improvement in reliability of assets.
"We expect earnings in 2022 to be healthy, albeit lower than the exceptionally strong earnings in 2021 due to the impact of new capacity coming onstream, higher feedstock cost and continued supply chain constraints during 2022," the petrochemicals company said in a statement.
SABIC also expects capital expenditures in 2022 to be higher than in 2020 and 2021 "so we can fund our non-discretionary investment in safe and reliable operations and also fund our sustainability and growth projects."
For full-year 2021, SABIC's net profit was 23 billion riyals compared with 0.07 million riyals in the year-ago period.
Riyadh-based brokerage firm SNB Capital said while SABIC's Q4 profit was below its estimate of 5.5 billion riyals, the impact of strong sales was offset by impairments and restructuring provisions of 0.76 billion riyals. "Adjusting for that, net income would be 5.69 billion riyals."
(Reporting by Brinda Darasha; editing by Seban Scaria)
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