Sabic profit jumps 80% in first quarter

01/05/2017 19:04 AST

Net profit at Saudi Basic Industries Corp (Sabic), one of the world's biggest petrochemical producers, jumped 80 per cent from a year earlier in the first quarter of 2017 on the back of higher sales prices for its products.

Sabic, which is majority state-owned, made a net profit of 5.24 billion Saudi riyals (Dh5.14bn) in the three months to March 31, up from 2.91bn riyals in the year-earlier period, the company said in a bourse statement on Monday.

That was in line with the forecasts of analysts polled by Reuters, who had on average predicted that Sabic would make a quarterly profit of 5.35bn riyals.

Gross sales for the first quarter totalled 36.95bn riyals, up 10 per cent from 33.47bn riyals a year ago.

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

Like other Saudi companies, Sabic began reporting its results under international IFRS accounting standards this year, so some of its figures for the first quarter of 2016 were restated. Last year, it reported a net profit of 3.41bn riyals for the quarter.

Kayan Petrochemical, in which Sabic owns a 35 per cent stake, reported a net profit of 265.5 million riyals for the quarter on Sunday, recovering from a loss of 195m riyals the previous year.

Sabic's shares closed up 1.1 per cent at 99.59 riyals on Monday, ahead of its results release. The company's shares are up 8.9 per cent for the year to date, with Saudi Arabia's Tadawul All Share Index down 2.9 per cent over the same period.

Sabic and ExxonMobil last month announced the selection of a site in San Patricio, Texas for the construction of a US$9.3bn petrochemicals plant, as part of ExxonMobil's $20bn "Growing the Gulf" initiative announced in March.

The National