SABIC said it rose by 4.8% from a year earlier to $9.5 billion (SAR 35.7 billion) in the three months to June 30, 2024, as average selling prices improved and sales volume slightly increased. Image by SABIC Petrochemical giant SABIC registered on Thursday an 84.7% year-on-year surge in its net profit for the second quarter, reaching $581 million (SAR 2.18 billion), thanks to enhanced margins on key products despite a rise in operating expenses.
Q2 highlights SABIC’s net profit came in much higher than analysts’ $241 million (SAR 904.25 million) estimate, according to Reuters, citing LSEG data.
Apart from better margins, SABIC took in non-cash benefits of $145.3 million (SAR 545 million) related to a reversal of Zakat provision from a recent update on tax regulations during the quarter, according to its earnings report. This compares to SABIC’s Zakat expense of $117.3 million (SAR 440 million) for the same period a year ago.
In terms of revenues, the Saudi firm said it rose by 4.8% from a year earlier to $9.5 billion (SAR 35.7 billion) in the three months to June 30, 2024, as average selling prices improved and sales volume slightly increased.
Revenue from its petrochemicals segment alone amounted to $8.9 billion (SAR 33.3 billion) in the second quarter, representing roughly 93% of its overall revenue, thanks to a higher sales volume of methanol.
However, revenues for the first half of 2024 registered a 3% decline to $18.2 billion (SAR 68.4 billion) compared to the same period in 2023, due to lower sales volumes.
Further, first-half net profit jumped 32% to $639.7 billion (SAR 2.4 billion) from $490.4 million (SAR 1.84 billion) last year.
Outlook SABIC said its long-term focus remains on strategically optimizing its portfolio, “restructuring underperforming assets, and prioritizing sustainability and innovation.”
It expects the company’s capital expenditures to be at the lower end of its $4 billion to $5 billion range for 2024.
Offloaded asset According to SABIC, the ownership transfer of its steel business, Hadeed, to the Saudi sovereign fund, the Public Investment Fund (PIF), was completed on June 1, 2024. The Hadeed sale, which had an enterprise value of $3.3 billion, was announced in September 2023. The move now enables the company to focus on its chemicals business.
Surprising fact SABIC, which ranked second on Forbes Middle East’s Top 100 Listed Companies 2023 list, was a notable dropout of this year’s ranking after it incurred a $102.5 million loss in 2023 compared to a $6.3 billion profit in 2022.
