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Saudi Basic Industries Corp. (Sabic) expects its financial performance in 2019 to be not as strong as in 2018, said its chief executive yesterday.
His comments came after the world's fourth largest petrochemical company recorded a 38% drop in first-quarter results, missing badysts' expectations.
"Our expectations are that 2019 is better than the market, but it will not be like in 2018," Yousef al-Benyan told reporters in Riyadh.
He said that a rise in world prices of some primary products used in the production of petrochemicals such as polycarbonate and methanol had a significant impact in late 2018 and the first quarter of 2019.
"Sabic continues to work on the internal affairs of the company to reduce external impacts," added al-Benyan.
Sabic posted net profit of 3.41 billion Saudi riyals ($ 909 million) as of March 31, compared to 5.51 billion riyals the previous year, the company said in a statement.
Analysts expect Sabic to make a net profit of 3.98 billion riyals in the first quarter, according to the average of five badysts' estimates polled by Refinitiv.
Sabic is expected to report net income of 21.25 billion riyals in 2019, up from 21.54 billion riyals in 2018, according to the average forecast of nine badysts surveyed by Refinitiv.
Sabic said average prices fell 8 percent quarter on quarter, driven by slowing global demand, a sluggish start to the year and a relatively high inventory level.
The company's results are closely linked to oil prices and global economic growth, as its products – plastics, fertilizers and metals – are widely used in construction, agriculture, industry and consumer goods manufacturing. .
Al-Benyan said the company will continue its growth strategy in foreign markets.
"We are focusing on Sabic's competitive strength and presence in the Chinese market as well as the US and African markets."
The Saudi national oil group Aramco concluded last month an agreement with the Public Investment Fund to acquire its controlling stake in Sabic for $ 69.1 billion.
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