Sabic posts record $1.73 billion Q2 profit
Riyadh, July 17, 2007
Saudi Basic Industries Corp. (Sabic), the world's largest chemical company by market value, made a record profit in the second quarter, beating analysts' forecasts on higher prices and output.
Sabic, which agreed to buy GE Plastics in May for $11.6 billion, said second-quarter net profit surged 42.2 percent to 6.5 billion Saudi riyals ($1.73 billion).
Analysts' forecasts for second-quarter profit ranged from 5.95 billion riyals to 6.45 billion riyals, according to a Reuters survey last month.
Sabic said sales rose 14 percent in the first half compared to the same period last year.
HSBC said on Saturday it expected Sabic's second-quarter profit to rise 38.5 percent, boosted by higher petrochemical prices.
Operating income from Sabic's metals business would grow 138 per cent to 891 million riyals, the bank had forecast.
Global prices for reinforcing steel bar rose 23.5 percent in the second quarter to about $630 per tonne from $510 per tonne a year earlier. At 3.77 million tonnes of output in 2005, Sabic is the largest Gulf Arab steel producer.
Sabic also got a boost from expansion at affiliate Saudi Arabian Fertiliser Co., which started commercial production at one of its projects in the quarter, Mohammed al-Nabrawy vice president of research at Dubai-based Shuaa capital said.
Saudi Arabian Fertiliser reported a record profit in the second quarter. Sabic's first half earnings per share were 5.1 riyals compared to 3.1 riyals in the same period last year. - Reuters