SABIC’s Q1 results lifted by associates, JVs: CEO

Abdulrahman Al-Fageeh, CEO of SABIC

SABIC Basic Industries Corp. (SABIC) posted positive results for the first quarter of 2024 buoyed by the performance of associates and joint ventures (JVs), CEO Abdulrahman Al-Fageeh said.

Some sectors are recovering, while others are under pressure as challenges continue in the motor sector, Al-Fageeh told Argaam in the Q1 2024 earnings call.

SABIC achieved profits from continuing operations of SAR 633 million in the first quarter, compared to losses of SAR 1.48 billion a year earlier. It also reported a net profit of SAR 246 million in the first quarter, compared to losses of  SAR 1.73 billion in the previous quarter.

He added that the EBITDA margin improved to 14%, from 10% in Q4 2023, exceeding average analyst estimates, backed by the company’s focus on the strategic business portfolio.

Al-Fageeh pointed out that the increase in profits is attributed to a rise in average selling prices, JVs and associate companies, along with a decrease in selling and distribution expenses due to the company's continuous efforts for better cost efficiency management.

Indicators are positive in the first quarter, but uncertainty remains in the petrochemicals markets, which are affected by supply and demand dynamics, global economic growth, and geopolitical factors that may lead to logistical difficulties.

He explained that despite rising global inflation levels and the challenges facing lending operations, some indicators have seen slight improvement, notably economic growth levels in many countries, especially leading economies.

He emphasized that the petrochemical industry continues to face numerous challenges due to the prevailing negative conditions in the overall economy and high supply levels, which put pressure on prices despite the slight improvement in global demand during the first quarter.

SABIC closely monitors all global economic developments and trends, adjusting its actions and decisions accordingly to maximize results and mitigate any negative impacts, serving the interests of customers and partners optimally, Al-Fageeh concluded.