Saudi Arabia’s SABIC reports 84% surge in net profit to $564m

RIYADH: Petrochemical giant Saudi Basic Industries Corp. saw an 84 percent year-on-year surge in net profit to SR2.18 billion ($564 million) in the second quarter of 2024, driven by higher margins and new zakat regulations. 

In a Tadawul statement, the company reported a 32 percent increase in gross profit to SR7.19 billion, driven by improved margins on key products and higher sales volume, though partially offset by non-recurring charges. Sales rose in the Americas, fell in Europe, and remained flat in China, the Middle East, and the Rest of Asia. 

The statement also highlighted a reversal of zakat provision, resulting in a SR545 million benefit in the second quarter 2024, compared to a SR440 million expense last year, due to recent updates in regulations. 

The company also noted that lower gains from the fair valuation of derivative equity instruments led to a SR556 million decrease in non-cash finance income. Additionally, the current quarter saw a SR226 million reduction in losses from discontinued operations. 

Abdulrahman Al-Fageeh, CEO of SABIC, said: “The global economy experienced a slight decline in the second quarter of 2024, primarily due to unexpected downturns in the recent economic indicators of major countries. Conversely, purchasing managers index data continued to indicate improvement in global economic conditions.” 

He added: “Furthermore, global trade showed signs of recovery, driven by higher exports, inventory restocking and increased financial activities. As inflationary pressures ease, some central banks have begun reducing interest rates, potentially providing additional stimulus to the global economy.” 

Sustainability remains a central focus for SABIC, and the Aramco-owned company has introduced a new certified low-carbon product portfolio to advance its 2050 carbon-neutrality goal, assist customers with their sustainability efforts, and expand into new markets. 

This aligns with the chemical manufacturing firm’s mission to deliver quality products and services responsibly through innovation, learning, and operational excellence, while maximizing value for stakeholders. 

Looking ahead, the company anticipates a global gross domestic growth of 2.7 percent in 2024.

“At SABIC, our long-term focus remains on strategic portfolio optimization, restructuring of underperforming assets, and prioritizing sustainability and innovation. We maintain a disciplined approach in managing our CAPEX, projecting a spending at the lower range of $4 (billion) to 5 billion for 2024,” it added.