Middle East

Benyan ... seeing weaker 2019

Benyan ... seeing weaker 2019

Sabic posts 38pc drop in Q1 net

RIYADH

Sabic made a net profit of SR3.41 billion in the three months to March 31, down from SR5.51 billion in the year-earlier period


Saudi Basic Industries Corp (Sabic) expects its financial performance in 2019 won’t be as strong as 2018, but will still beat market forecasts, its chief executive said.

His comments came after the world’s fourth-biggest petrochemicals giant posted a 38 per cent drop in first-quarter earnings, missing analyst expectations.

'Our expectations are that 2019 will be better than what the market gives, but it will not be as it was in 2018,' Yousef al-Benyan told reporters in Riyadh.

He said a rise in global prices of some primary products used in the production of petrochemicals like polycarbonate and methanol had a big impact at the end of 2018 and in the first quarter of 2019.

'Sabic continues to work on internal corporate affairs to reduce external impacts,' Benyan added.

Sabic made a net profit of 3.41 billion Saudi riyal ($909 million) in the three months to March 31, down from 5.51 billion riyals in the year-earlier period, the company said earlier in a bourse statement.

Analysts expected Sabic to make a net profit of 3.98 billion riyals in the first quarter, according to the average of estimates of five analysts polled by Refinitiv.

Sabic is forecast to post a net profit of 21.25 billion riyals in 2019, compared to 21.54 billion riyals in 2018, according to an average forecast by nine analysts polled by Refinitiv.

Sabic said average prices decreased by 8 per cent quarter-on-quarter, driven by slowing global demand, a slow start to the year and a relatively high level of inventories.

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

Benyan said the company would continue its strategy to grow in overseas markets.




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