‎“SABIC” profits fell to SR 1.18 billion during Q2, by 85%‎

The net profit after zakat and tax of the Saudi Basic Industries Corporation (SABIC) decreased to 1.18 billion riyals during the second quarter, compared to 7.93 million riyals in the same quarter of last year, by 85%. This came after today’s announcement of the preliminary financial results for the ending period on June 30, 2023 AD.

Operational profit amounted to 1.43 billion riyals in the second quarter, compared to 10.25 billion riyals in the same quarter of last year, a decrease of 86%.

As for the total profit, it amounted to 5.37 billion riyals in the second quarter, compared to 15.09 billion riyals in the same quarter of last year, a decrease of 64%.

The net profit after zakat and tax during the 6-month period amounted to 1.84 billion riyals, compared to 14.4 billion riyals in the same period last year, an increase of 87%.

Earnings per share in the current period amounted to 0.61 riyals, compared to 4.8 riyals in the same period last year.

The global economy witnessed a continued slowdown as a result of tightening global monetary policies to confront global inflation, which led to a decrease in the average selling prices of the company’s products and a decrease in the quantities sold. As a result, there was a sharp decline in gross profit and earnings before interest and taxes (EBIT) Despite the decrease in the cost of feedstock materials and the decrease in selling and distribution expenses

On an annual basis, SABIC’s share in the results of non-integrated joint ventures and associates decreased significantly.

SABIC’s main markets were subjected to a continuous decline in demand and an increase in supply for most of the company’s products, which led to a decrease in average selling prices, which was partially offset by a decrease in the cost of feedstock.

As a result, gross profit and EBIT decreased by a moderate amount compared to the previous quarter.

In the second quarter, the revaluation of gains in options rights related to joint venture agreements positively affected the company’s financial results, which led to an increase in net income compared to the previous quarter.

The global economy witnessed a continued slowdown as a result of tightening global monetary policies to counter global inflation, which led to a decrease in the average selling prices of the company’s products and a decrease in the quantities sold.

As a result, there has been a sharp decline in gross profit and EBIT, despite lower feedstock cost and lower selling and distribution expenses.

From the beginning of the year to date, SABIC’s share in the results of non-integrated joint ventures and associates decreased compared to the previous year. This negative impact was offset by a re-evaluation of option rights gains related to joint venture agreements and a decrease in zakat and tax expenses. Consequently, the net income decreased compared to the previous year.

The company said that some comparative figures have been reclassified to conform to the presentation for the current period, without affecting income from operations and net income.