SABIC Profits Hit SR4.24bln, due to its Holdings in 3-Company -Analysts predict

SABIC is set to announce its 4th-quarter and annual results, in 2021, before the start of today’s session.

On the other hand, 4 of the Saudi market’s listed companies revealed a growth in profits or a shift to profitability, in 2021, compared to 2020, and another 4 stated that the main reason for the profit growth or shift to profitability was the influx of foreign capital.

SABIC made profits of as much as SR4.24 billion from three firms, holding interest, in 2021, namely SABIC Nutrients, in which it owns 50.1%, Yansab 51%, and Kayan 35%.

SABIC Agri-nutrients and Yansab both reported profit increases of 304% and 126%, respectively, while Kayan Petrochemicals reported a shift from losses to profits in 2021.

In earlier reporting, analysts expect the company to earn profits of about SR5.9 billion in the quarter ending December 31, 2021, a significant increase of 166% over the profits of the same quarter last year, at SR2.22 billion, and a 5.5% increase over the profits of Q3-2020.

The four companies that collaborate with SABIC on one or more of their goods, on the other hand, have all reported that their products have increased in price, implying that at least 7 SABIC products have increased in price, according to their announcements. This is on top of the growth in average iron prices (one of SABIC’s operational areas, which, according to earlier “Maaal” monitoring, rose for eighteen months in a row at the end of December 2021.

As a result of this information, we anticipate excellent results for SABIC in the 4th quarter and in 2021.

The 4 companies stated that the increase in average prices of their products was the main reason for their positive results, and looking at the four companies’ products, it is clear that SABIC shares 7 of those products with them, namely polyethylene, polypropylene, mono-ethylene glycol, tertiary methyl butyl ether, gasoline, urea, and ammonia, and SABIC also produces polystyrene, polyvinyl chloride, pure terephthalate.

In addition to the growth in average steel costs, polypropylene has a rate of 51% in favor of SABIC’s outcomes.

The company’s activity is centered in three primary sectors: petrochemicals and specialty (86.5% of sales), agricultural nutrients (5.7% of revenues), and iron (7.8% of revenues), according to SABIC’s financial disclosures for the first nine months of the year.