Saudi Basic Industries Corp (SABIC), one of the world’s biggest petrochemicals firms, said on Thursday its quarterly net profit more than doubled from a year ago on the back of higher selling prices and volumes.
SABIC’s net profit after zakat and tax was 4.93 billion riyals ($1.31 billion) in the fourth quarter from 5.59 billion riyals in the previous quarter and 2.25 billion riyals in the fourth quarter of 2020.
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Revenues in the quarter were 51.28 billion riyals, 56 percent higher than a year prior.
The fourth quarter profit missed analysts’ average expectations by 10.4 percent, according to Refinitiv data. But net profit after zakat and tax for 2021 came in at 23.03 billion riyals, beating analyst estimates of 22.36 billion riyals.
The result was a marked turnaround from 2020’s 70 million riyals net profit.
SABIC said net income was hampered by 760 million-riyal impairment and restructuring provisions for capital assets and “non-cash” charges of 590 million riyals from re-measuring derivatives equity instruments for forward contracts related to joint venture agreements.
EFG Hermes noted the unexpected one-off charges and said the current year looked set to be more challenging as global chemical margins are weighed down by improving supply and waning demand.
“As such, we believe the peak is behind us for now and expect earnings to see some pullback going forward,” EFG Hermes said, adding though that SABIC historically benefits from high oil prices.
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