Saudi chemicals giant SABIC plans to cut costs and find new investment opportunities, it said on Wednesday after reporting worse than expected fourth-quarter results against a sectoral backdrop dominated by margin pressures.

The chemicals industry has been grappling with weak demand and high input costs, leading to lower prices and squeezed margins.

SABIC, one of the world's largest petrochemicals companies, posted a net loss of 1.89 billion riyals ($504 million) for the three months to December 31, against a loss of 1.73 billion riyals a year earlier.

Analysts had expected a profit of a little more than 1 billion riyals, LSEG data shows.

"Fixed costs usually go up in the winter ... also in the fourth quarter, especially the final month, there is a decrease in quantities sold," Salah Al-Hareky, executive vice president for corporate finance, told reporters.

SABIC also took an impairment of $311 million because of its stock performance, he said on an analysts call. Its shares are down nearly 5% since the start of the year.

SABIC, 70% owned by oil major Saudi Aramco, swung to a 2024 net profit of 1.54 billion riyals from a net loss of 2.77 billion riyals in 2023.

Its cost reduction and capital efficiency programme has already begun in an effort to improve competitiveness while seeking potential opportunities for "selective investment", Al-Hareky said without disclosing how it will cut costs.

SABIC aims to restructure some core assets while offloading non-core businesses with a view to potential participation in consolidation within the sector, Al-Hareky said.

It has already divested its stakes in Aluminum Bahrain (Alba) and steel business Hadeed, selling both to other state-backed Saudi entities.

CEO Abdulrahman Al-Fageeh said in SABIC's earnings release that monetary easing was helping to support the industry but "overcapacity continues to be a challenge, especially for polymers".

"Ethylene demand growth remains slower than capacity growth, leading to sustained pressure on capacity utilisation rates," he said, adding that the company's stable core profit margin demonstrated its resilience in difficult market conditions.

SABIC projected capital investment of between $3.5 billion and $4 billion this year, against guidance of $4 billion to $5 billion for 2024.

(Reporting by Pehsa Magid in Riyadh and Yousef Saba in Dubai Editing by Jacqueline Wong and David Goodman)