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PROFITS FALL TO $1bn

Sabic ... oil slide blamed for profit fall.

Sabic Q1 revenues down 28pc to $9.48bn

RIYADH, April 19, 2015

Revenues at Saudi Basic Industries Corp (Sabic) plunged 28 per cent from a year earlier to SR35.56 billion ($9.48 billion), and dropped 18 per cent from the previous quarter, acting chief executive Yousef Abdullah Al-Benyan said on Sunday.

He was speaking to reporters after the company, one of the world's largest petrochemicals groups, reported a 39 per cent year-on-year drop in first-quarter net income, blaming the slide in oil and petrochemical product prices.

Sabic made a net profit of SR3.93 billion ($1.05 billion) in the three months ending March 31, down from SR6.44 billion in the year-earlier period.

Al-Benyan said the fall in oil and petrochemical product prices was "out of control", but that his company was nevertheless well placed to deliver sustainable growth and superior returns, helped by 4 per cent gross domestic product growth expected in Saudi Arabia this year.

The outlook is positive for the Asian petrochemicals market because of growth in China, while Africa looks promising for future investment, he added.

Al-Benyan said the company had no plans at present to tap the debt market, and was not planning to refinance a loan maturing in June.

The company is not in the business of hedging currencies and that is not on its radar, but it does its best to maintain cash to meet its needs in Europe and minimise its exposure to swings in the euro exchange rate, he said in answer to a question about the impact of the euro's weakness.

Sabic's first-quarter net income was above the average forecast of seven analysts polled by Reuters, who had predicted Sabic would make a quarterly profit of SR3.50 billion.

The company's results are closely tied to oil prices and global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.

Lower oil prices adversely affected Sabic's earnings in the final quarter of 2014 and the company warned in January that 2015 earnings would be unpredictable, with challenges especially prominent in the early part of the year. - Reuters




Tags: Saudi Arabia | sabic | petrochemical |

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