Saudi Chemicals Maker Sabic Posts Profit as Demand Revives
Added 10-25-20 06:04:02am EST - “(Bloomberg) -- Saudi Basic Industries Corp., the chemical maker in which Saudi Aramco holds a majority stake, returned to profit in the third quarter amid signs that demand is recovering from the impact of the coronavirus.The company,…” - Finance.yahoo.com
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(Bloomberg) -- Saudi Basic Industries Corp., the chemical maker in which Saudi Aramco holds a majority stake, returned to profit in the third quarter amid signs that demand is recovering from the impact of the coronavirus.
The company, known as Sabic, said third-quarter profit was 1.09 billion riyals ($290 million) compared with 740 million riyals in the same period last year. Profit rose mainly due to the reversal of 690 million riyals of impairments associated with Clariant AG, in which Sabic holds a 31.5% stake. Revenue in the three months to the end of September fell 11% to 29.3 billion riyals.
Sabic said it benefited from a rebounding world economy but remained cautious on the outlook. Petrochemicals prices have picked up due to higher crude prices and stronger demand after the initial wave of virus-related lockdowns in the second quarter, Chief Executive Officer Yousef Al-Benyan said in an online briefing. “Still, it’s not clear yet on the impact of the second wave, and we are assessing the impacts of this on the global economy,’ he said.
The results indicate that Sabic is turning a corner after reporting its biggest quarterly loss in at least a decade between April and June, as the pandemic hit sales of plastics, cosmetics and other petrochemical products. A writedown in the value of some assets also hurt second-quarter profit, and that followed the company’s decision in May to suspend new capital expenditure to protect its balance sheet.
Earlier this month, Sabic announced the scaling back of a planned $20 billion facility to convert crude directly into chemicals, a sign that efforts to cut costs amid weaker demand for chemicals are affecting investment. Sabic is developing the Yanbu project on Saudi Arabia’s Red Sea coast together with Aramco.
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