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Petrochemicals giant Saudi Basic Industries Corp (Sabic) reported a 62.1% y-o-y drop in net income in the first quarter of the year to SAR 250 mn, down from SAR 660 mn in the corresponding quarter a year earlier, according to its earnings release (pdf). Tevenues were down 10% y-o-y to SAR 32.7 bn over the same period.
A look at q-o-q: On a quarterly basis, Sabic reversed a net loss of SAR 1.73 bn. Revenues were down 7% over the same period.
Why the dip? Sabic — one of the world’s largest petrochemicals companies — attributed the decline in net income to lower revenues, lower contributions from associates and joint ventures, and losses booked as a result of discontinued operations. Revenues declined on the back of a 3% drop in average selling prices and 7% decline in quantities sold, it said.
Looking ahead: “The first quarter of this year has presented global and regional improvement in prices of major petrochemical products mainly driven by demand improvement and logistic disruption. The market has yet to grow into the recent run of capacity investments and this overcapacity continues to place significant pressure on our industry. The gap between excess supply and moderated demand growth is set to remain in place for 2024.” Sabic CEO Abdulrahman Al Fageeh said.
Highlights of the first quarter: A joint venture between Sabic and China’s Fujian Energy Petrochemical broke ground in February on a world-scale USD 6.4 bn petrochemical complex in China’s Fujian. The project comes as part of a plan Sabic is implementing to diversify its feedstock sources and expand its manufacturing presence in Asia. It also shut down its Olefins 3 naphtha cracker in Geleen in the Netherlands “based on a careful evaluation of market conditions.”
REMEMBER- Sabic reported a net loss of SAR 2.8 bn in 2023 in what was the petrochemical giant’s first net-loss ever, according to Bloomberg. The losses came partly due to discontinued operations after the divestment of its steel subsidiary Hadeed.
ALINMA BANK-
Alinma Bank’s net income grew 35.6% y-o-y to SAR 1.3 bn in 1Q 2024, driven by a 18% uptick in total operating income, it said in a disclosure to Tadawul. The lender’s total income from special commission of financing was up 36.9% y-o-y to SAR 3.3 bn, while its total income from special commission of investment increased by 33.9% y-o-y to SAR 460 mn over the same period.
