SABIC delivers solid performance in Q2 2021, expects strong demand until year-end: CEO

Yousef Al-Benyan, Vice Chairman and CEO of SABIC

Saudi Basic Industries Corp.’s (SABIC) financial performance in the second quarter of 2021 was strong, continuing the improvement in margins seen during the first quarter of the year, said Yousef Al-Benyan, Vice Chairman and Chief Executive Officer (CEO).

This was driven by higher sales volumes and prices, supported by a rise in oil prices and a healthy supply and demand balance for most of SABIC’s key products as the global economy continued its path to recovery.

“Distributing dividends to our shareholders is a priority for SABIC. In June 2021, SABIC’s board recommended a cash dividend distribution of SAR 1.75 per share for the first half of 2021, approximately 17% higher than the cash dividend distribution of SAR 1.50 per share for the second half of 2020,” Al-Benyan said.

He added that 2021 is on course to be a stronger year compared with 2020. In the second half of the year, demand is expected to remain strong with the global gross domestic product (GDP) growth rate increasing between 5.5% and 6% in 2021.

“In the second half of 2021, we expect margins to moderate but to remain healthy as oil prices and feedstock costs remain elevated. While, existing supply constraints ease and new supply capacity comes on line,” Al-Benyan noted.

SABIC remains focused on generating the maximum value from synergies with Saudi Aramco. Since the deal close in June 2020 and until the end of Q2 2021, SABIC achieved a synergy value of $230 million.

Procurement was a major contributor in the value creation recorded in the second quarter of the year. This was achieved by leveraging SABIC and Saudi Aramco purchasing power and applying warehouse and logistics optimization methods, Al-Benyan concluded.

SABIC reported a net profit after Zakat and tax of SAR 12.5 billion for the first half of 2021, against a net loss of SAR 3.3 billion in the year-ago period, Argaam reported.

The major petrochemical producer also swung to a net profit after Zakat and tax of SAR 7.6 billion, against a net loss of SAR 2.2 billion in the year-ago period.