Sabic Q2 net profit jumps 81% on higher selling prices and improved sales
29 Jul 2018
Sabic, the Middle East’s biggest petrochemicals company, posted an 81 per cent increase in second-quarter net income, beating analysts’ estimates, as sales volumes rose and average selling prices of its products climbed.
Net income for the three months ending June 30 reached 6.7 billion Saudi riyals (Dh6.56bn), Sabic said on Sunday in a filing to the Saudi stock exchange, where its shares are traded.
Sales jumped 26 per cent year-on-year to 43.3bn riyals and rose 3 per cent quarter-on-quarter, while costs fell, the company said.
The earnings came in above the second-quarter net profit estimate of 5.76bn riyals by Bahrain’s Sico, 5.92bn riyals by EFG Hermes and 5.84bn riyals by NCB Capital.
“The increase in net income is attributable to higher average selling prices and increase in sales volumes,” the company said. “During this period Sabic implemented strategic restructuring initiative with an impact on total cost amounted to 1.1bn riyals.”
Public companies covered by Egyptian investment bank EFG Hermes in Saudi Arabia, the world’s biggest oil exporter and the region’s largest economy, are expected to post an aggregate 20.3 per cent year-on-year growth in second-quarter income, it said in a report released earlier. The kingdom’s industrial sector including the petchems sector is expected to lead the rise as the Saudi economy recovers on the back of a rise in oil price.
Sabic, in particular, is being watched closely after the world’s biggest oil producing company, Saudi Aramco, earlier this month said it is in talks with the petchems company’s majority shareholder, the Public Investment Fund to acquire a stake in it.