SABIC confronts revenue decrease, struggles amid worldwide petrochemical deceleration

(MENAFN) The Saudi Basic Industries Corporation (SABIC), a prominent player in the global petrochemical industry, experienced a notable decline in revenues during the fourth quarter of the previous year. SABIC reported an approximately 11 percent decrease in revenues for the October-December period, amounting to 35.03 billion riyals (USD9.34 billion), which fell below Refinitiv's average estimate of 35.9 billion riyals. This decline in revenue was attributed to a combination of factors, including reduced average selling prices and quantities sold, primarily driven by the sluggish global demand for petrochemicals coupled with an increase in global supply.

For the entire fiscal year, SABIC's sales witnessed a significant downturn, plummeting by 23 percent to 141.54 billion riyals. The decrease in revenues was predominantly influenced by the aforementioned factors contributing to the slowdown in global demand for petrochemical products. Additionally, SABIC recorded a net loss of 2.77 billion riyals for the year, with the cessation of operations cited as a primary factor. This loss was primarily driven by the fair valuation of Hadeed, a subsidiary of SABIC.

SABIC had previously warned of potential challenges in the latter half of the year, citing factors such as a slower-than-expected recovery in the Chinese economy following the relaxation of Covid-related restrictions and a decline in demand across Europe. These macroeconomic headwinds further exacerbated SABIC's performance, highlighting the company's vulnerability to global market dynamics and economic conditions beyond its control.

MENAFN28022024000045015682ID1107909956