SAUDI ARABIA: Saudi Basic Industries Corp (SABIC), the world's biggest petrochemical firm by market value, reports a drop in fourth-quarter profits
Record ID:
189259
SAUDI ARABIA: Saudi Basic Industries Corp (SABIC), the world's biggest petrochemical firm by market value, reports a drop in fourth-quarter profits
- Title: SAUDI ARABIA: Saudi Basic Industries Corp (SABIC), the world's biggest petrochemical firm by market value, reports a drop in fourth-quarter profits
- Date: 18th January 2012
- Summary: RIYADH, KINGDOM OF SAUDI ARABIA (JANUARY 17, 2012) (REUTERS) VARIOUS OF EXTERIOR OF SABIC HEADQUARTERS IN RIYADH SENIOR MANAGEMENT OF SABIC SEATED AT NEWS CONFERENCE PHOTOGRAPHER VARIOUS OF REPORTERS SEATED AT THE SABIC NEWS CONFERENCE (SOUNDBITE) (Arabic) MOHAMMED AL-MADI, SABIC VICE CHAIRMAN AND CEO, SAYING: "Despite the fall of prices in the fourth quarter, and their fall for all petrochemical companies globally, the results for the whole year were record results. The year 2011 was the best year in the history of SABIC, in terms of the production, sales and profits." MORE OF REPORTERS SEATED AT THE NEWS CONFERENCE (SOUNDBITE) (English) MOHAMMED AL MADI, SABIC VICE CHAIRMAN AND CEO, SAYING: "My prediction hopefully is that 2012 will be maybe a mirror image of 2011. We are going to start slow and then maybe pick up toward the end of the year and maybe 2013 is going to be even better." REPORTERS CLOSE OF REPORTERS WRITING REPORTER ASKING AL MADI (SOUNDBITE) (English) MUTLAQ ALMORISHED, SABIC CFO, SAYING "Forty billion for fourth quarter 2010. Full year 2011 is 190 billion, 2010 151 billion." REPORTERS AL MADI THANKING REPORTERS AND LEAVING NEWS CONFERENCE
- Embargoed: 2nd February 2012 12:00
- Keywords:
- Location: Saudi Arabia, Saudi Arabia
- Country: Saudi Arabia
- Topics: Business,Industry
- Reuters ID: LVACEGTSY5DBPFNV4OT60ARZ5OVV
- Story Text: Saudi Basic Industries Corp (SABIC) reported a 10-percent drop in quarterly profit on Tuesday (January 17, 2012), missing forecasts, as the world's biggest petrochemical firm by market value felt the impact of lower prices.
SABIC made a net profit of 5.24 billion riyals ($1.40 billion) for the three months to end December, compared with 5.81 billion riyals in the same period a year earlier.
Analysts surveyed by Reuters expected the firm to post, on average, a net profit of 7.4 billion riyals for the fourth quarter.
The bellwether Middle East conglomerate, which supplies chemicals, industrial polymers, fertilisers and metals globally, posted record profit in the second and third quarters last year.
SABIC Chief Executive Mohammed al-Mady said that while Q4 profits were down, 2011 as a whole was a record year.
"Despite the fall of prices in the fourth quarter, and their fall for all petrochemical companies globally, the results for the whole year were record results. The year 2011 was the best year in the history of SABIC, in terms of the production, sales and profits," Mady told reporters.
He added: "My prediction hopefully is that 2012 will be maybe a mirror image of 2011... we are going to start slow and then maybe pick up toward the end of the year and maybe 2013 is going to be even better."
Mady said fourth quarter sales rose to 47 billion riyals, from 40.8 billion in the prior-year quarter. On the year, SABIC had sales of 190 billion riyals, up from 151 billion riyals in 2010.
He also said the company had no plans to issue new debt in 2012.
The company recently signed an agreement with China to develop a new polycarbonate factory there, using SABIC technology. The move reflects global demand trends, with Europe becoming an increasingly difficult market.
Over the past year, several SABIC subsidiaries have brought on line new production capacity, increasing the company's sales volumes at a time of high chemical prices.
Mady said no new production was expected to come on stream this year.
Strong oil prices last year also enhanced the comparative advantage enjoyed by Saudi chemical producers, which typically use gas feedstock, over global rivals which buy naphtha at prices linked to crude.
However, the sector's dependence on highly cyclical machinery makers, carmakers and builders makes SABIC, which is 70 percent state owned, particularly vulnerable to an economic downturn.
Mady said the Eurozone credit crisis was already impacting SABIC.
SABIC shares closed 2.1 percent lower on the Saudi Arabian bourse ahead of the results. - Copyright Holder: REUTERS
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