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SABIC posts near 4% rise in Q2 net profit

Saudi Basic Industries Corp (SABIC) said on Tuesday that it expects margins to be under pressure in the second half of 2022, due to a slowdown in global growth, lockdowns in China, conflict in Europe and continued supply chain challenges.

The guidance from the world's fourth-biggest petrochemicals firm by sales and asset value came as it reported an almost 4% rise in second-quarter net profit.

SABIC achieved a net profit of 7.93 billion riyals ($2.11 billion) for the three months to June 30, up from 7.64 billion a year earlier, the company said in a bourse statement.

That beat the 6.16 billion riyals mean forecast of seven analysts, Refinitv data showed.

It attributed the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses.

Sales rose 32% to 55.98 billion riyals, exceeding an analysts' forecast of 53.78 billion.

Average selling prices rose 22% and were up 3% from the first quarter, SABIC said in its earnings presentation. Sales volumes increased 10% year on year and 3% quarter on quarter.

The company said profits were also buoyed by an increase in its share of results of associates and joint ventures.

SABIC said it expects earnings before interest, tax, depreciation and amortization (EBITDA) to be flat this year with higher sales volumes offsetting high feedstock prices.

Oil giant Saudi Aramco owns 70% of SABIC.

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