News Column

SABIC posts SR12.9bn net profit in H1

July 20, 2014

By Md Rasooldeen, Arab News, Jeddah, Saudi Arabia



July 21--RIYADH -- Saudi Basic Industries Corporation (SABIC) has achieved net profits amounting to SR12.9 billion in the first half of the fiscal year, 2014.

Speaking at a press conference, SABIC's Chief Executive Mohamed Al-Mady pointed out that the company's dividends per share within 6 months amounted to SR4.3 in compared to SR4.2 during the same period of the last year.

Announcing a seven percent increase in the second-quarter net income, Al-Mady said the company earned SR6.46 billion in the second quarter compared to SR 6.04 billion in the corresponding period last year.

The global outlook for petrochemical demand over the next three years is promising and there is room for prices to rise, Al-Mady said. He added that this year, the business outlook would remain similar to 2013, with petrochemical product prices probably staying stable.

"Forecasts suggest shale gas, a potential feedstock for petrochemicals, will only be produced in large quantities from the United States in 2018, leaving room for improvement in petrochemical prices before then," he noted.

He pointed out that Africa was a very promising market for SABIC and the company has been focusing on opening distribution centers in a number of African countries, especially for fertilizers and plastics.

SABIC's sales in the second quarter climbed to SR48.15 billion ($12.84 billion) from SR44.99 billion a year earlier.

The company attributed the rise in profits to higher production and sales volumes as well as higher prices for products and income from associated companies and also due to low financial charges.

However, this was partly offset by a dip in sales volumes and an increase in feedstock costs for some products, the official said.

The company's results are closely tied to global economic growth because its products -- plastics, fertilizers and metals -- are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.

Referring to the Saudi Kayan Petrochemical Company, which dragged down the benchmark sliding 2.6 percent after it reported a quarterly loss of SR133.1 million, Al-Mady said it could be restored since there is room for improvement because of its good technology. Constructive efforts will be made to improve the revenues, he stressed.

The Saudi Kayan is engaged mainly in establishing, managing, and operating an industrial complex in Jubail Industrial City to produce ethylene, propylene, polypropylene, polyethylene, ethylene glycol, aminomethyls, dimethylformamide, choline chloride, amino ethyl, ethoxylates in addition to polycarbonate, with a total production and marketing capacity of 2.6 million tons per annum.

He added that the regional unrest will not affect the petrochemical market since the countries affected are not involved in the relevant business.

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(c)2014 the Arab News (Jeddah, Saudi Arabia)

Visit the Arab News (Jeddah, Saudi Arabia) at www.arabnews.com

Distributed by MCT Information Services


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Source: Arab News (Saudi Arabia)


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