Sabic Q4 profits fall on steel writedowns
riyadh — Saudi Basic Industries Corp (Sabic), the world’s fourthbiggest petrochemicals company, reported an 18.6 per cent drop in fourth-quarter net profit, missing analysts’ forecasts, as sales dropped and its steel business was hit by writedowns.
Last week, Sabic bought a 25 per cent stake in speciality chemicals group Clariant, ending the Swiss company’s fight with activist investors.
Sabic has said it has no current plans to launch a full takeover of Clariant but the acquisition has prompted uncertainty about Clariant’s future as Saudi Arabia seeks to diversify its economy and reduce its reliance on oil.
Sabic CEO Yousef Al Benyan said: “At this point, we are going to work with Clariant management on how can we leverage the existing relationship that we have.”
He said the company could build on an existing 50/50 jointventure between Sabic and Clariant on scientific design.
“So by leveraging our existing relationship and leveraging our new positions in this company, we will see where are the synergies that is going to benefit both parties.”
He also said Sabic could self-finance the Clariant stake acquisition, but did not rule out the possibility of inviting banks to part-finance the deal, adding: “We have our options, we will look into our best one”.
Al Benyan said there were still challenges in the steel market, but he was optimistic about the company’s outlook for 2018.
Al Benyan said the company expects to cut costs between five to seven per cent in 2018, somewhat similar to 2017. — Reuters