Saudi Arabia’s petrochemical sector’s earnings are forecast to rise 95.2% to SAR 1.31 billion in Q2 2024, compared to SAR 671 million in Q1 2024, AlJazira Capital said in a new report.

The quarterly income jump will be driven by an average 3% increase in product prices despite a decline in propane and butane prices.

However, net income is expected to fall 31% year-on-year (YoY), the report said.

Saudi Basic Industries Corporation (SABIC) is expected to report a net profit of SAR 670 million in Q2 2024 compared to SAR 246.2 million in Q1 2024, surging 172% quarter-on-quarter (QoQ).

National Industrialization Company (Tasnee) is predicted to swing to a profit of SAR 81.8 million in Q2 2024 against a loss of SAR 72.1 million in Q1 2024, supported by better margins and contributions from associates.

Advanced Petrochemical Company is likely to swing to a net profit of SAR 57.6 million in Q2 2024 from a loss of SAR 58.4 million in the last quarter, recovering from the plant maintenance and improved product spreads amid a reduction in feedstock prices.

However, the sector continues to face headwinds such as a lack of sustainable demand recovery due to high interest rates and weak macro fundamentals, a spike in shipping costs and logistical challenges due to the Red Sea issue.

(Editing by Seban Scaria seban.scaria@lseg.com)