May 18, 2022
SABIC profit up 33% on higher prices, volumes

DUBAI, May 12 (Reuters) – Saudi Basic Industries Corp (SABIC), one of the world's biggest petrochemicals firms, on Thursday beat expectations with a 33% rise in first quarter net profit on higher prices and volumes.

SABIC's net profit of 6.47 billion riyals ($1.72 billion) after Islamic zakat and other taxes topped the 5.125 billion riyals forecast by analysts, Refinitiv data showed.

Sales rose 40% to 52.64 billion riyals, topping an analysts forecast of 50.042 billion.

"In 2022, SABIC will remain focused on delivering its growth strategy, achieving operational resilience and meeting our ESG (environmental, social and governance) commitments while at all times maintaining a strong balance sheet," CEO Yousef Abdullah al-Benyan said in a statement.

Average selling prices were up 26% from a year earlier and 3% higher than in the fourth quarter of last year, Benyan told a news conference.

"We think the second half of 2022 is going to be under pressure still due to the slowdown (of economic growth globally), due to inflation, also due to an increase in interest rates, which leads to… there may be some pressure on demand," he said.

SABIC expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be flat this year as higher sales volumes offset higher feedstock prices, it said in the statement.

Benyan said SABIC has no current plans to tap the debt markets and its financial position meant easy access to loans.

State oil giant Saudi Aramco bought a 70% stake in SABIC from Saudi Arabia's PIF sovereign wealth fund in June 2020.

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SABIC said synergies from Saudi Aramco's stake purchase as of March 2022 stood at 2.09 billion riyals, including 334 million riyals in 2022.

($1 = 3.7510 riyals)

Reporting by Yousef Saba; editing by Jason NeelyEditing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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