SABIC says pressure on margins likely to continue in H1 2023

SABIC Acting CEO Abdulrahman Al-Fageeh

Saudi Basic Industries Corp. (SABIC) expects pressure on margins to continue in the first half of 2023 on weak demand and additional global production capacities of major products.

The giant petrochemical producer noted that global GDP growth rate for 2023 is estimated at 2.1%.

Acting CEO Abdulrahman Al-Fageeh said SABIC 2022 results remain strong despite challenging market conditions.

"Our sales volumes continue to grow, exceeding the previous year’s sales by 9% driven by growth projects, improved reliability, inventory optimization and synergies with Saudi Aramco," he noted.

The top executive unveiled a target of one million metric tons of TRUCIRCLE™ solutions by 2030, which shows the company's ongoing commitment to sustainability and innovation.

Driving circularity for plastics requires a rapid transformation of the entire value chain.

"Our focus on Capex discipline resulted in 7% below 2021 spend", Al-Fageeh said, noting that maximizing shareholder returns remains a priority with 6.25% higher declared cash dividend in 2022.

SABIC posted a 29% drop in net profit after Zakat and tax to SAR 16.5 billion in 2022, from SAR 23.1 billion in 2021. Q4 2022 net profit after Zakat and tax dived 94% to SAR 293 million, according to data compiled by Argaam.