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Sabic revenues hit $11.65bn in Q3; profit $1.5bn

RIYADH, October 28, 2021

Petrochemicals giant  Saudi Basic Industries Corporation (Sabic) today announced a revenue of SR43.7 billion ($ 11.65 billion) for the third quarter of 2021, an increase of 3% compared with the second quarter of 2021.
 
The revenue was up 49% compared to the third quarter of 2020.
 
Sabic's post-tax profit jumped five-fold to SR5.6 billion ($1.5 billion), up from SR1.1 billion a year earlier, helped by higher average selling prices.
 
However, the net income was lower than the SR7.64 billion ($2.04 billion) achieved during the second quarter of 2021, the company said.
 
The third quarter of 2021 saw average sales prices increase by 5% compared with the second quarter of 2021. Sales volumes slightly decreased by 2% in the third quarter of 2021 compared with the second quarter of 2021. 
 
For the first nine months of 2021, average sales prices increased by 50% and sales volumes decreased by 4% compared with the first nine months of 2020.
 
Sabic reported a healthy financial performance in the third quarter of 2021 compared with an especially strong performance in the previous quarter, supported by higher average sales prices. However, as anticipated, there was a moderation in margins due mainly to a rise in feedstock costs.
 
Sabic's EBITDA amounted to SR11.20 billion ($2.99 billion) in the third quarter of 2021, representing a decrease of 18%, quarter-over-quarter. This was due primarily to higher feedstock prices as well as selling & distribution expenses due to a rise in freight costs. These were partially offset by increasing average sales prices during the third quarter of 2021 compared with the previous quarter. This resulted in an EBITDA margin of 26% in the third quarter of 2021, which was lower than the 32% obtained during the second quarter of 2021, Sabic said.
 
Yousef Abdullah Al-Benyan, Vice Chairman and Chief Executive Officer of Sabic, said: "Sabic's healthy financial performance during the third quarter of 2021 marked a continuation of our recovery from the impact of Covid-19, albeit at a lower level than our exceptionally strong performance during the second
quarter. We did, however, see a moderation in margins in the third quarter mainly due to rising feedstock costs, which offset the increase in average sales prices."
 
Al-Benyan continued: "Sabic announced the start of commissioning activities and preparations for the initial start-up of the petrochemicals joint venture project in the US Gulf Coast (Gulf Coast Growth Ventures). This project supports Sabic's global growth strategy, and its aim to diversify its feedstock sources and strengthen its petrochemical manufacturing presence in North America."
 
Outlook
2021 is on course to be a stronger year compared to 2020. The company expects the global GDP growth rate to increase between 5.5% and 6% in 2021 (no change from our previous expectation). In the fourth quarter, it expects demand to be healthy. "However, we expect feedstock costs to remain elevated with higher oil prices. We are also seeing new capacities coming on line for some of our key products. In addition, as the existing supply constraints continues to ease, we expect to see a further moderation in margins in the fourth quarter," Sabic said. - TradeArabia News Service
 



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