Chemicals maker Sabic’s profit surges as economies reopen

Chemicals maker Saudi Basic Industries Corp.’s profit jumped as the reopening of the global economy led to higher demand for its products used in everything from packaging to buildings and agriculture.

Net income was SAR4.86bn ($1.3bn) in the first quarter, more than double the level of the previous three-month period. It was also turnaround from a loss of SAR1.05bn a year ago.

“The first quarter saw rising oil prices and a tight supply and demand balance,” said chief executive officer Yousef Al-Benyan. “These elements, combined with growing demand as the global economy continues to recover, resulted in higher prices and margins for most of our products.”

While sales volumes fell 8 per cent from the fourth quarter, average prices rose by 22 per cent, the Riyadh-based company, controlled by Saudi Aramco, said on Thursday. Margins are expected to remain at similar levels through June, it said.

Revenue rose 24 per cent year-on-year to SAR37.5bn and 14 per cent from the previous quarter.

Sabic benefits from subsidised raw materials such as oil and gas from its parent. The company didn’t provide any update on the potential initial public offering of its specialty unit.

The shares fell 2.5 per cent to SAR124.60 at 11.15am in Riyadh on Thursday, paring some of Wednesday’s gain of 6.5 per cent. The company’s stock is up 74 per cent in the past year and its market value rose above $100bn this week for the first time in almost two years.