Sabic’s Q1 profit jumps by a third as revenue grows amid continued product demand

Saudi Basic Industries Corporation, the Middle East’s biggest petrochemicals company, reported a 33 per cent jump in first-quarter profit after revenue rose on higher average selling prices and volumes.

Net profit after zakat and tax for the three months to the end of March climbed to 6.47 billion Saudi riyals ($1.73bn), Sabic said in a statement to the Tadawul stock exchange, where its shares are traded.

Revenue during the period rose 40 per cent to 53bn riyals.

“Sabic’s first-quarter results demonstrated strong performance, driven by continued healthy demand for our products, higher oil prices and our diverse global portfolio,” said vice chairman and chief executive Yousef Al-Benyan. Oil prices have increased by more than 60 per cent from last year, supported by supply concerns caused by Russia’s military offensive in Ukraine.

Brent, the global benchmark for two thirds of the world’s oil, hit a 14-year high of about $140 a barrel in the middle of March.

“In 2022, Sabic will remain focused on delivering its growth strategy, achieving operational resilience and meeting our ESG commitments while, at all times, maintaining a strong balance sheet,” Mr Al-Benyan said.

Saudi Aramco, the world’s largest oil-exporting company, acquired a 70 per cent stake in Sabic in 2020 for $69bn.

Sabic said it had acquired Clariant’s 50 per cent stake in Scientific Design Company, giving the Saudi Arabia’s petrochemicals major full ownership of the US-based company.

Sabic’s average sales prices in first quarter increased 3 per cent, compared with the fourth quarter of last year. Sales volumes fell 1 per cent during the same period.

With the global economy expected to grow annually by 3.2 per cent to 3.6 per cent, compared with 5.8 per cent last year, Sabic expects its earnings before interest, taxes, depreciation and amortisation (Ebitda) to remain flat, mainly due to the increase in sales volumes being offset by higher input costs.

The company’s Ebitda rose 23 per cent year-on-year in the first quarter to 12.8bn riyals.

Company’s net profit after zakat and tax for the three months to the end of March climbed to 6.47bn Saudi riyals