Saudi Basic Industries Corp (SABIC), the world's largest chemicals company by market value, posted its first decline in quarterly net profit in more than two years on a slowdown in sales growth. SABIC, which competes with Dow Chemicals and BASF, made 7.24 billion riyals ($1.93 billion) in the three months to September down, from 7.4 billion riyals a year earlier, it said in a statement posted on the bourse website on Saturday.
Analysts' forecasts for third-quarter profit ranged from 6.64 billion riyals to 7.27 billion riyals, according to a Reuters survey last month. Earnings per share in the third quarter were 2.42 riyals versus 2.47 riyals a year earlier, based on Reuters calculations. "There is no impact on SABIC's financial operations as a result of the existing financial crisis. Loans necessary to finance projects buildup and existing expansions have been completed in ample time prior to the start of the current crisis," Chief Executive Mohamed al-Mady said in the statement. Annual sales volume growth was 3 percent for the nine months to September 30, half its level for the six months to June 30, as reported by the firm in July.
Operating profit in the nine months to September 30 rose 20 percent to 29.64 billion riyals after an "improvement in the prices of most core products", it said. Net profit in the nine months to September 30 rose 8 percent to 21.71 billion riyals, leading to an adjusted earnings per share of 7.24 riyals for that period against 6.72 riyals a year earlier, it added.
SABIC is bearing the financing cost of its $11.6 billion acquisition of GE Plastics. SABIC included a full quarter of GE Plastics earnings in its financials for first time in the three months to December 31. SABIC shares fell on Saturday by almost the maximum 10 percent limit on concerns the firm would post weak third-quarter earnings.