Saudi Basic Industries Corp (SABIC) has cited pressure on global sales prices as it reported a year-on-year (YoY) profit fall of 89.8%, down to SAR 0.66 billion ($176 million) versus SAR 6.47 billion one year ago.  

It's Q1 net profit dropped 90% as average sales prices and volumes fell.

The company reported net income of 660 million riyals for Q1 2023, down from 6.47 billion riyals in the same quarter last year.

CEO Abdulrahman Al-Fageeh, who was appointed in March, said: “We are closely monitoring the changes and the recovery of the global market demand.

“New capacities in Q1 2023 are adding more pressure on global prices, while there is limited relief on variable cost.”

Al Fageeh said the company would continue to keep operating costs under control.

He added that Saudi Arabia’s Shareek programme, a government initiative under which $51.2 billion of investments was announced for large companies, including SABIC, will play a key role in the company’s next growth phase

“The first package of initiatives was launched during this first quarter of 2023, whereby SABIC will contribute to the transformation of Saudi Arabia into a manufacturing hub for specialised materials through a strategic project to build and manufacture catalysts.”

The company said SABIC expects an average global GDP growth rate of 2.1% for 2023.

“High inflation and interest rates continues to add to the uncertainty of global demand growth. We expect margins to remain under pressure in Q2 2023,” a statement said.

(Writing by Imogen Lillywhite; editing by Daniel Luiz)

(imogen.lillywhite@lseg.com)