Saudi Arabia’s SABIC posts near four percent increase in Q2 net profit

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Saudi Basic Industries Corp (SABIC) said on Tuesday that it expects margins to be under pressure in the second half of 2022, due to a slowdown in global growth, lockdowns in China, conflict in Europe and continued supply chain challenges.

The guidance from the world’s fourth-biggest petrochemicals firm by sales and asset value came as it reported an almost four percent rise in second-quarter net profit.

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SABIC achieved a net profit of SAR 7.93 billion ($2.11 billion) for the three months to June 30, up from SAR 7.64 billion a year earlier, the company said in a bourse statement.

That beat the SAR 6.16 billion mean forecast of seven analysts, Refinitv data showed.

It attributed the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses.

Sales rose 32 percent to SAR 55.98 billion, exceeding an analysts’ forecast of SAR 53.78 billion.

Average selling prices rose 22 percent and were up four percent from the first quarter, SABIC said in its earnings presentation. Sales volumes increased 10 percent year on year and three percent quarter on quarter.

The company said profits were also buoyed by an increase in its share of results of associates and joint ventures.

SABIC said it expects earnings before interest, tax, depreciation and amortization (EBITDA) to be flat this year with higher sales volumes offsetting high feedstock prices.

Oil giant Saudi Aramco owns 70 percent of SABIC.

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