SR930 mln SABIC Total Profits from 3-Firms

Before the start of next coming session, the Saudi Basic Industries Corporation (SABIC) is expected to release its business results for the third quarter of 2021, according to “Maaal” follow-up.

Four of the Saudi market’s listed companies revealed a growth in profits or a transformation to profitability in the third quarter and first nine months of 2021.

In addition to the “Yansab” company, which announced that the increase in average selling prices for all products contributed to limiting the profit decline, the four companies stated that the main reason for the increase in profits or the shift to profitability was the rise in average selling prices of their products.

The five companies have a joint venture with SABIC in one or more of their goods, indicating that 7 of SABIC products have seen a price increase, in addition to the increase in the average price of iron, according to what those companies have announced (one of the operational sectors of SABIC).
As a result of this information, we anticipate excellent results for SABIC in Q3-2021.

SABIC Agri-Nutrients and Advanced Petrochemicals reported profit increases of 203.5% and 39.74%, respectively, in Q3-2021, while Kayan Petrochemicals reported a turnaround from losses to profits in Q3-2021.

The five companies stated that the increase in average prices of their products was the main reason for their positive results, and we discovered that “SABIC” shares 7 of those products with them, namely polyethylene, polypropylene, monoethylene glycol, tertiary methyl Butyl ether, gasoline, urea, and ammonia, and SABIC also produces (polystyrene, polyvinyl chloride, pure terephthalic acid), which are all positive results. In addition to the increase in the average steel price.

The average iron price in the Kingdom climbed by 24.3% in Q3-2021, according to data released on the General Authority for Statistics’ website.

Company’s activity is centered on three primary sectors: petrochemicals and specialty (85.9% of revenues), agricultural nutrients (5.8% of revenues), and iron (8.3% of revenues), according to SABIC’s financial statements for Q2-2021.

SABIC achieved SR929.75 million profits, from its stake in three of the five companies, namely SABIC Nutrients, in which it hold 50.1%, “Yansab,” in which it hold 51%, and “Kayan,” in which it hold 35%, according to the lists of main stakeholders.
It may earn also another SR6.56 billion, in profits in the quarter ending September 30, 2021, a significant increase of 502% over the profits of the same quarter last year, which were at SR1.09 billion, but a 14% decrease from the profits of Q2-2021, which were SR7.64 billion, analysts expect.

If the profits come in as projected, the company will make a profit for the fifth quarter in a row, following three quarters of losses from the fourth quarter of 2019 to the second quarter of 2020.

That the business results of nine publicly traded companies in Q3 and first nine months of 2021 are expected to be positive, with increases in polypropylene prices (47% in Q3 and 51% in the nine months) and propylene prices (27% in Q3 and 37% in the nine months), as polypropylene is one of the nine companies’ final products, and five of those companies produce propylene.

Companies’ participating with SABIC results, in all or some products

Company Q3 Profits 2021 Q3 Earnings 2020 Difference % Reasons for growth Products

SABIC Nutrients (50.1% of SABIC) 1,206.47 397.53 203.5% average selling price of products increased Urea and ammonia
Advanced 218 156 39.74% increase in prices of propane, propylene, purchased from external sources by 108% and 27%, respectively Polypropylene
Yansab (51% for SABIC) 179.8 195.6 -8.08% company announced increase in average selling prices for all products, contributed to limiting decrease in profit Polyethylene, Polypropylene, Monoethylene Glycol, MTBE, Benzene

Kayan Petrochemicals (35% to SABIC) 667.45 -28.16 2470% increase in average selling price of products Polyethylene, polypropylene, monoethylene glycol, polycarbonate, bisphenol A

Minerals 1,272 6 19549% increase in average sales prices for all products, except gold Ammonia, diammonium phosphate

Profits earned by SABIC in the second quarter of 2021, totaling SR7.64 billion, are the greatest in the last 10-year, surpassing the company’s profits of SR8.19 billion in Q3-2011. “SABIC’s” profits in Q2 were the greatest since Q2-2011, according to “Maaal”, the leading Saudi online business daily, investigation.

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