Saudi Basic Industries Corp expects higher steel prices and new petrochemical units to deliver a second-quarter net profit above the $1.45 billion it made in the first quarter. The world's biggest chemical firm by market value saw net profit during the first quarter rise 19 percent from the fourth quarter of 2009.
Asked if SABIC would be able to replicate during the second quarter the same growth rate, Chief Executive Mohamed al-Mady said: "All indicators show that (quarter-to-quarter) growth will continue, although at a lower pace".
Earlier this year, the company started units at both the 4 million tonne per year Yanbu National Petrochemicals Co (and at the expanded Jubail's Eastern Petrochemical Co, and will soon start commercial operations at the 3.2 million tonne per year Tianjin complex in China, a joint-venture with Sinopec. "Predicting prices is tough under the current conditions. Prices of some petrochemical products started contracting and there are new capacities entering the international market ... We will play on quantities to help our revenues grow," Mady told reporters at SABIC's headquarters.
SABIC's turnover rose to 34 billion riyals in the first quarter, up from 19.6 billion riyals a year earlier and 32 billion riyals in the fourth quarter of 2009.
What helped SABIC during the first quarter was an improvement in US demand and sustained solid demand from China, he said. "The automotive business improved dramatically ... electronics as well," Mady said.
Saudi Fertilisers Co, in which SABIC holds a nearly 43 percent stake, has put on hold a fifth expansion programme to add 2.7 million tonnes of urea and ammonia per year at a cost of $500 million and which was set to start in 2011.
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