Saudi Basic Industries Corp (SABIC), one of the world’s largest petrochemicals firm, swung to net loss of 720 million riyals in the fourth quarter of 2019 as average selling prices declined.
The company, which is in the final stage of having a significant stake being acquired by state energy firm Saudi Aramco, made a profit of 3.22 billion riyals during the same quarter a year earlier, the company said in an exchange filing on Wednesday.
The loss was also due to a 2.8 billion impairment provision at its affiliate Arabian Industrial Fibers Co (Ibn Rushd), SABIC said.
Ibn Rushd’s complex in Yanbu, on Saudi Arabia’s Red Sea coast, produces aromatics, purified terephthalic acid (PTA) which is used in making polyester, and polyester staples.
Meanwhile, SABIC’s Q4 revenues were 32.81 billion riyals, down 3 per cent from the year-earlier period. Sales volumes however were up 5 per cent in the quarter.
“The petrochemical industry was negatively impacted in 2019 by additional new supply in key products coming on-stream coupled with a moderation in global growth compared to 2018. However, our strong focus on cost controls and safe and reliable operations mitigated some of these negative factors in 2019,” Yousef Abdullah Al-Benyan, vice chairman and chief executive officer of SABIC said in a results statement.
In early 2019, energy giant Saudi Aramco agreed to buy a 70 per cent stake in Saudi Basic Industries Corp (SABIC) from the kingdom’s wealth fund (Public Investment Fund) for $69.1 billion in one of the biggest deals in the global chemical industry. EU antitrust regulators will decide by Feb. 27 whether to clear the acquisition, according to a European Commission filing.