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SABIC posts 67% fall in Q3 profit on higher costs, impairment

The headquarters of Saudi Basic Industries Corp (SABIC) is seen in Riyadh, Saudi ArabiaThe headquarters of Saudi Basic Industries Corp (SABIC) is seen in Riyadh, Saudi Arabia April 19, 2016. REUTERS/Faisal Al Nasser

DUBAI, Oct 30 (Reuters) – Petrochemicals firm Saudi Basic Industries Corp (SABIC) (2010.SE) said on Sunday it expected margins to be under pressure in the fourth quarter as its third quarter net profit fell 67% year-on-year on higher costs and an impairment charge.

SABIC's net profit fell to 1.84 billion riyals ($489.62 million) from 5.59 billion riyals in the third quarter of 2021.

The petrochemicals giant said in a stock exchange filing an impairment provision of 510 million riyals "was recognized on financial assets," without giving details.

Average sales prices in the third quarter fell 15% from the second quarter, while sales volumes also dropped 1% in the same period, SABIC said in a statement.

Average sales prices were still up 15% and volumes 11% higher in the first nine months of this year compared to the year-prior period, it added.

Oil giant Saudi Aramco (2222.SE) owns 70% of SABIC. SABIC said its "value capture associated" with Aramco since it took the stake in June 2020 was 3.64 billion riyals, including 2.09 billion riyals in the first nine months of 2022.

This month, SABIC began commercial operations at its third ethylene glycols plant in Jubail.

"Capital discipline remains a focus area and we estimate that we will end the year with 20% less capital expenditure than planned," Abdulrahman al-Fageeh, SABIC's acting chief executive, said in the statement.

Fageeh was named CEO on Sept. 28 after former CEO Yousef Abdullah al-Benyan resigned following his appointment as Saudi minsiter of education.

($1 = 3.7580 riyals)

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Source reuters.com

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