DUBAI - Saudi Basic Industries Corp (SABIC), the world's 4th-biggest petrochemicals firm, reported a 47% rise in third-quarter profit, beating estimates on higher sales and output, but warned it still faces price pressures for some time to come.
SABIC reported a net profit of 1.09 billion riyals ($291 million) in the quarter that ended on September 30, up from 740 million riyals in the same period a year earlier. The result came after three straight quarters of losses, on a jump in impairment charges and drop in sales.
Still SABIC cautioned that supply still exceeds demand for its key products, which will continue to pressure product prices and margins for the foreseeable future.
The third-quarter return to profit, SABIC said, was mainly due to higher average selling prices, higher production and sales volume, in addition to a reversal of impairment provisions in certain financial assets in the quarter of about 690 million riyals.
Analysts had expected SABIC to post a net profit of 775 million riyals, according to a mean estimate of analysts based on Refinitiv Eikon data showed.
"The third quarter of 2020 benefited from an improvement in economic activity and an increase in oil price, which translated in higher product prices," SABIC CEO Yousef al-Benyan said in a statement.
($1 = 3.7503 riyals)
(Reporting by Saeed Azhar; Editing by Kenneth Maxwell) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: email@example.com))