Saudi Basic Industries Corp (Sabic), one of the world's largest petrochemical producers, reported a net profit of SR5.2 billion ($1.4 billion) for the first quarter of this year, an 80 per cent jump from the same period last year.

The marked increase in net profit came on the back of higher sales prices for its products and improved operating performance.

Sabic’s Q1 revenue rose 10.4 per cent year-on-year to SR37 billion on improved product prices, largely in line with Al Rajhi Capital's estimate of SR36.4 billion but
beat consensus estimate of SR35.8 billion.

Its operating profit came in at SR8.4 billion, mostly in line with Al Rajhi Capital's forecast of SR8.2 billion. Despite higher feedstock prices in Q1, the company’s
operating profit increased 78.8 per cent year-on-year, primarily due to higher revenue coupled with improved cost efficiencies.

Consequently, operating margin expanded to 22.6 per cent in Q1 2017, up 860bps from 14 per cent in Q1 2016.

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 consumer goods manufacturing, said a Reuters report.
 
The healthy petchem segment performance and better operating efficiencies could help Sabic to post strong operating performance in 2017, said an Al Rajhi Capital analysis. - TradeArabia News Service