Riyadh, Saudi Arabia — Saudi Basic Industries Corporation, the Middle East’s biggest petrochemicals company, has posted an 87 percent drop in first half 2023 net profit to SAR 1.8 billion, from SAR 14.4 billion in H1 2022.
In a Tadawul statement, SABIC said the global economy is continuously slowing down as a result of tightening monetary policies to confront inflation, leading to weaker demand and a decrease in the average selling prices of the company’s products as well as lower quantities sold.
“As a result, there was a sharp decline in gross profit and EBIT, despite lower feedstock cost and lower selling and distribution expenses,” the statement reads.
Year to date, SABIC’s share in the results of non-integral joint ventures and associated companies decreased versus prior year. This adverse effect was offset by re-measurement gains in option rights related to joint venture agreements and lower Zakat and tax expenses. Hence, net income decreased in accordance with the result from operations compared to prior year.
In Q2 2023, net profit fell 85 percent to SAR 1.2 billion from SAR 7.9 billion in the prior year period, mainly due to weaker demand and a decrease in the average selling prices of the company’s products as well as lower quantities sold.
Compared to Q1 2023, net profit climbed 78.8 percent from SAR 660 million, due to the re-measurement gains in option rights related to joint venture agreements.
Total shareholders’ equity, after minority interests, fell to SAR 176.78 billion as of June 30, 2023 from SAR 180.66 billion a year earlier.