SABIC net profit in second quarter plummets 68% drop in petrochemical prices

Dubai –
SABIC, the producer of petrochemicals bought by Saudi Aramco, recorded a 68.4% drop in net income in the second quarter of 2.12 billion Riyals ($ 565 million), due to falling oil prices. petrochemicals and the creation of new offers.

"The slowdown in global GDP growth coincides with a drop in petrochemical prices due to a significant increase in new supply capacity, resulting in lower product prices and margins on major product lines, "said Yousef al-Benyan, vice president and general manager of SABIC, on Sunday. in a statement on the Saudi stock exchange where his shares are traded.

"The new capabilities of the key product lines that put pressure on SABIC's pricing and product margins in the first half of 2019 are expected to continue to impact the Company's results in the second half of 2019."

Second quarter sales fell 17 percent to Rs35.87 billion. Low-price products included mono-glycol, which posted the second-lowest price since 2009, SABIC said.

SABIC, the largest petrochemical producer in the Middle East, announced last week that it has suspended negotiations for the creation of a joint venture with European specialty chemicals producer Clariant due to the current economic situation. "unfavorable" market. SABIC, Clariant's largest shareholder with a stake of 24.99%, signed a memorandum of understanding in September 2018 to combine SABIC's specialties with the additives of the Swiss company and its large masterbatch offers. value.

Saudi Aramco, a state-owned company, agreed in 2019 to acquire 70% of SABIC from the country's sovereign wealth fund for $ 69 billion, as part of the project to expand its petrochemical portfolio. . Saudi Aramco and SABIC strengthen their footprint in the petrochemical industry and sign agreements in and out of the Gulf to access raw materials and get closer to their customers.

After obtaining all necessary permits and approvals, ExxonMobil and SABIC announced in June that they were considering building a new-build petrochemical complex in Texas.

–Dania Saadi, [email protected]

– Edited by Claudia Carpenter, [email protected]