SABIC’s CEO says average product prices slid 18% in Q2, slightly improved in Q3

Saudi Basic Industries Corp. (SABIC) saw a drop of 18% in Q2 2020 product prices when compared to the previous quarter and a 27% fall year-on-year (YoY), Vice Chairman and CEO Yousef Al-Benyan told Argaam.

Chemicals prices decreased 30% compared to Q1 2020. Similarly, prices of agrinutrients and polymers slid 18% and 11%, respectively on a quarterly basis.

“The second quarter was the most hit by the COVID-19 pandemic, due to the economic shutdown. However, SABIC’s production and sales edged down just 1%,” Al-Benyan added on the sidelines of a virtual press conference held today.

On the other hand, Al-Benyan stressed that the allocated provisions are not related to any restructuring process. The assets were valued amid the current market challenges, in line with SABIC’s strategy and commercial plans to soften the impact of the pandemic.

This comes as part of SABIC’s continuous operations. The company evaluates some assets in terms of profitability, productivity and strategy. The outcome of these operations becomes clear amid challenges, as is the case today.

Moreover, prices and demand have marginally improved in the third quarter, and SABIC is keen to capitalize on this rise.

The giant petrochemical producer focuses on maintaining reliability, production enhancement, and communication with clients to meet their demand. This will help boost SABIC’s sales and cut administrative and operating expenses.

“We hope the second half of the year will be better than the previous half,” Al-Benyan said.

The petrochemical producer reported a net loss after Zakat and tax of SAR 3.27 billion for H1 2020, compared to a net profit of SAR 5.35 billion in year-earlier period.

In Q2 2020, SABIC swung to a net loss after Zakat and tax of SAR 2.22 billion, against a net profit of SAR 2.03 billion a year earlier.