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.
|
SABIC’s Results by Quarter (SAR bln) |
||||||
|
2015 |
2014 |
Period |
||||
|
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|
|
42.09 |
35.56 |
43.44 |
48.07 |
48.15 |
49.2 |
Sales |
|
(29.45) |
(26.12) |
(32.19) |
(34.33) |
(34.70) |
(35.10) |
Cost |
|
12.64 |
9.44 |
11.24 |
13.74 |
13.41 |
14.13 |
Gross income |
|
30.03% |
26.55% |
25.87% |
28.58% |
27.85% |
28.72% |
Gross income margin |
|
(0.41) |
(0.37) |
(0.46) |
(0.36) |
(0.40) |
(0.39) |
Financing expenses |
|
(3.04) |
(1.79) |
(3.07) |
(3.72) |
(3.29) |
(3.84) |
Minority interest |
|
6.17 |
3.93 |
4.36 |
6.18 |
6.46 |
6.44 |
Net income |
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.
|
SABIC profit by segment (SAR bln) |
||||||
|
2015 |
2014 |
Period |
||||
|
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|
|
8.44 |
2.89 |
5.74 |
7.32 |
7.00 |
7.60 |
Petrochemical |
|
0.68 |
0.70 |
0.96 |
1.19 |
0.91 |
1.11 |
Fertilizers |
|
0.06 |
0.10 |
0.42 |
0.26 |
0.35 |
0.31 |
Metals |
|
(3.00) |
0.24 |
(2.77) |
(2.60) |
(1.80) |
(2.58) |
Main center and settlements |
|
6.18 |
3.93 |
4.35 |
6.17 |
6.46 |
6.44 |
Total |
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.
|
Balance Sheet |
|||
|
Change |
June 2015 |
June 2014 |
Period |
|
(2%) |
332.5 |
339.00 |
Assets (SAR bln) |
|
+1% |
161.41 |
160.27 |
Shareholders’ equity (SAR bln) |
|
+1% |
53.80 |
53.20 |
Book value (SAR) |
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.
|
SABIC’s Cash & Loans (SAR bln) |
|||||
|
Loans/ shareholders’ equity |
Net debt/shareholders’ equity |
Net debt |
Loans |
Cash |
Period |
|
0.47 |
0.05 |
7.9 |
76.8 |
68.9 |
Q2 2015 |
|
0.49 |
0.01 |
2.4 |
82.2 |
79.8 |
Q1 2015 |
|
0.51 |
0.06 |
10.2 |
83.2 |
73.0 |
Q4 2014 |
|
0.53 |
0.11 |
17.4 |
83.7 |
66.3 |
Q3 2014 |
|
0.51 |
0.09 |
14.1 |
81.6 |
67.5 |
Q2 2014 |
|
0.52 |
0.06 |
9.4 |
83.8 |
74.4 |
Q1 2014 |
|
0.52 |
0.09 |
13.6 |
81.9 |
68.3 |
Q4 2013 |
|
0.54 |
0.13 |
19.2 |
81.6 |
62.4 |
Q3 2013 |
|
0.55 |
0.13 |
19.5 |
81.5 |
62.0 |
Q2 2013 |
|
0.61 |
0.10 |
14.8 |
92.3 |
77.5 |
Q1 2013 |
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