SABIC’s Q2 results mark return to strong growth

Saudi Basic Industries Corp.’s (SABIC) Q2-2015 net profit (SAR 6.17 billion) marked a return to strong growth, while the firm also saw its highest gross profit margin (30 percent) since 2013, market data compiled by Argaam showed.

However, second-quarter net profit declined four percent when compared to Q2-2014, hurt by a 12 percent year-on-year drop in sales and lower sales prices.

Net profit jumped 57 percent between Q1-2015 and Q2-2015 on increased sales prices, as well as higher production and sales volumes.  

The company’s petrochemicals segment saw a significant increase in Q2-2015 net income to SAR 8.44 billion. Meanwhile, fertilizers witnessed a slight decline compared to Q1-2014. Metals recorded a 40 percent year-on-year drop in net profit.

Looking at SABIC’s balance sheet, assets declined two percent year-on-year to SAR 332.5 billion in Q2-2015. Shareholders’ equity rose slightly to SAR 161.4 billion, while book value edged up to SAR 53.80 per share.

Cash increased by two percent year-on-year to SAR 68.9 billion in Q2. Net debt decreased to SAR 7.9 billion compared to Q2-2014, but increased on a quarterly basis from SAR 2.4 billion.  

SABIC’s debt eased over the last few years to reach SAR 76.8 billion in Q2, an improvement mainly attributed to the repayment of SAR 6 billion in debt during H1-2015. Most of the petrochemical giant’s expansions were also completed during the period.