Saudi petrochemicals giant Sabic swings into profit

Saudi petrochemicals producer Sabic swung back to profit in the third quarter amid an improvement in economic activity and higher oil prices.

Sabic posted net profits of SR1.09bn ($291mn) in the third quarter, versus a loss of SR2.22bn ($592mn) in the second quarter. Profits in the three months ending 30 September were also 47pc higher than SR740mn in the corresponding quarter last year.

Sabic's third quarter profits were attributable to improved economic activity and higher oil prices, which led to higher prices for the company's petrochemicals products, Sabic chief executive Yousef al-Benyan said.

This was the first quarter in which the company posted profits since the third quarter last year.

Al-Benyan added that the strength of Sabic's supply chain allowed the company to deal with the current global economic crisis, helping it to increase its sales and improve its margins.

Sabic and state-controlled Saudi Aramco, which owns a 70pc stake in the petrochemicals producer, announced earlier this month that they are reassessing a $20bn integrated crude to chemicals project in Yanbu on the west coast.

The two companies had in 2017 signed a preliminary agreement for the project, which was envisaged to process 400,000 b/d of crude to produce 9mn t/yr of chemicals and base oils. But the companies are instead considering integrating Aramco's existing refineries in Yanbu with mixed feed steam cracker and derivative olefins units to increase cost efficiency and competitiveness.

By Samira Kawar