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Saudi Basic Industries Corp (SABIC), one of the biggest petrochemical companies globally, said on Thursday it pivoted to a loss of 2.88 billion riyals ($768 million) in Q3 2023 on lower demand leading to a drop in sales revenue.
According to LSEG data, analysts’ average forecast for SABIC was a net loss of SAR 135.7 million in Q3.
The petrochemicals major had posted a net profit of SAE 1.84 billion in the year-earlier period, it said in a regulatory filing on Riyadh's Tadawul bourse.
Revenue for Q3 fell 17% to SAR 36 billion. "The stagnation in global demand for chemicals, which led to a decrease in average selling prices, and thus a decrease in the value of sales by SAR 7.3 billion despite the increase in the quantities sold."
The quarter saw a decrease in SABIC's share in the results of joint ventures and associated companies, amounting to SAR 919 million, due to the drop in their sales quantity and lower selling prices.
SABIC also recorded SAR 255 million impairment charge in certain capital assets as part of the restructuring program in Europe to improve the return on investment.
Free cash flow stood at SAR 5.24 billion in Q3 versus prior quarter’s free cash flow of SAR 0.41 billion due to improved EBITDA, optimized working capital and focused capex discipline, SABIC said.
SABIC said it expects a CAPEX spend of up to $3.8 billion for 2023.
(Reporting by Brinda Darasha; editing by Seban Scaria)