Saudi Basic Industries Corp (SABIC), one of the world’s largest petrochemical groups and the Gulf’s biggest listed firm, reported a 5.7 per cent rise in fourth-quarter net income, missing analysts’ forecasts.
The company’s results are closely tied to global economic growth because its products – plastics, fertilisers and metals – are used extensively in construction, agriculture, industry and the manufacture of consumer goods.
It earned 6.16 billion riyals ($1.64 billion) in the quarter, up from a slightly revised figure of 5.83 billion riyals a year earlier, SABIC said on Sunday.
Seven analysts polled by Reuters had forecast, on average, that SABIC would record a net profit for the quarter of 6.58 billion riyals.
Operating profit rose much more slowly than net profit in the fourth quarter, edging up just 0.5 per cent to 10.30 billion riyals.
U.S. production of shale gas has emerged as a major challenge for SABIC, threatening to make its American rivals more competitive, but Chief Executive Mohamed al-Mady said shale output would not become heavy before 2016, so the market would remain firm in 2014 and 2015.
“We think 2014 will be slightly better than 2013,” because of forecasts for higher product prices, he told a news conference.
He later told Reuters that Europe appeared to be recovering from its long economic slump so the petrochemical market there was improving, and he expected further strength.
Asked about SABIC’s approach to acquisitions, Mady said it was opportunistic, but he stressed that the company was very interested in investing in the United States and China.
For the whole of 2013, net profit climbed 1.8 per cent to 25.23 billion riyals, while company officials said sales were roughly flat at about 189 billion riyals.