SABIC H1 2023 profit slumps 87% to SAR 1.8 bln; Q2 at SAR 1.2 bln

Saudi Basic Industries Corp. (SABIC) reported an 87% slump in H1 2023 net profit to SAR 1.8 billion from SAR 14.4 billion in H1 2022.

The global economy faces a continuous slowdown as a result of tightening monetary policies to confront inflation, leading to weaker demand and a decrease in average selling prices of the company's products as well as lower quantities sold.

Accordingly, gross profit and EBIT sharply declined despite lower feedstock cost and lower selling and distribution expenses.

Year to date, SABIC's share in the results of non-integral joint ventures and associated companies decreased compared with a year earlier. This adverse effect was offset by re-measurement gains in option rights related to joint venture agreements and lower Zakat and tax expenses. Hence, net income decreased in accordance with the result from operations compared to the prior year period.

In Q2 2023, net profit fell 85% to SAR 1.2 billion from SAR 7.9 billion in the prior year period, mainly due to weaker demand and a decrease in the average selling prices of the company's products as well as lower quantities sold.

Compared to Q1 2023, net profit climbed 78.8% from SAR 660 million, due to the re-measurement gains in option rights related to joint venture agreements.

Total shareholders’ equity, after minority interests, fell to SAR 176.78 billion as of June 30, 2023 from SAR 180.66 billion a year earlier.

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