SABIC boosts profits and expands operations in Europe

Saudi Basic Industries Corporation (SABIC) has announced an impressive 85% increase in profits for the second quarter of this year, far exceeding analysts' expectations. According to Asharq Business with Bloomberg, the company's profit reached 2.18 billion riyals (588.6 million dollars), against average forecasts of 859.5 million riyals (232.1 million dollars).

SABIC, the kingdom's largest petrochemicals company, attributed the sharp increase to improved profit margins on key products, it said in a statement on Thursday (1 August). In addition, the reversal of a provision for zakat (religious wealth tax in Islamic countries) expenses resulted in non-cash income of 545 million riyals during the quarter, while losses related to discontinued operations were reduced by 226 million riyals. .

On the revenue side, the company recorded a year-on-year growth of 5% to 35.72 billion riyals. This increase was mainly due to improved average selling prices of products and a slight increase in sales volumes. These figures exceeded revenue expectations, which were estimated at approximately 33,859 million riyals.

However, SABIC's profits showed a decrease compared to the same period last year, falling to 246.2 million riyals at the end of Q1 2024, compared to 656.9 million riyals in Q1 2023. 

In terms of investments, the company forecasts capital expenditure this year of between 4 billion and 5 billion dollars. 

On a separate note, Abdulrahman Al-Faqih, CEO of SABIC, announced the opening of a new hydroprocessing plant in Geleen, the Netherlands. This facility is central to the advanced recycling process, converting pyrolysis oil derived from post-consumer plastic waste into alternative feedstock for the production of SABIC-certified circular polymers within its TruCircle portfolio.

On the dividend front, the company's board of directors approved the distribution of dividends to shareholders totalling 5.1 billion riyals for the first half of this year, representing a 6% increase compared to the second half of 2023, according to Al-Faqih at a recent press conference.

Finally, the continued cooperation with Saudi Aramco, which owns 70% of SABIC, was highlighted. To date, this collaboration has reached a cumulative value of 2.08 billion dollars, with integration in the areas of sourcing, supply chain, manufacturing, marketing and sales. This collaborative approach not only strengthens SABIC's position in the global marketplace, but also drives innovation and efficiency across the value chain.