The profits of the Saudi Basic Industries Corporation (SABIC), the largest producer of petrochemicals, fertilizers and steel in the Middle East, rose in the first quarter of this year, recording the highest level since Q1 2020, exceeding analysts’ estimates.
The company said in a statement today, that its profits rose to 6.5 billion riyals (+33 percent) at the end of Q1. It explained that the reason for the increase in profits compared to the same quarter of the previous year is due to the increase in the average selling prices of products and an increase in the quantities sold.
Among the most important results of the first quarter on an annual basis, according to the company’s statement, are the following:
– Net profit increased by 33.1 percent to reach 6.47 billion riyals (compared to average analyst estimates of 5.3 billion riyals).
– Revenue growth by 40.2 percent to 52.6 billion riyals (average forecasts of analysts 51.3 billion riyals).
– Total shareholders’ equity (after excluding minority interests) amounted to 187.58 billion riyals, a growth of 9.4 percent.
-Earnings per share amounted to 2.16 riyals, compared to 1.62 riyals.
Q1 2022 results positively affected by rise in oil prices
In a statement announcing the financial results, Youssef Al-Benyan, the company’s CEO, indicated that Q1 results were positively affected by the rise in oil prices, the increase in demand for the company’s products, its diversity, and the distribution of its business and sales globally.
The huge Saudi company expects global growth to slow from an average of 8.5 percent in 2021 to a range between 2.3 percent and 6.3 percent in 2022, due to the lack of clarity in the economic landscape, especially in the second half of the year, according to Al-Benyan.
While the CEO expected this slowdown to put pressure on the profit margins of the company’s main products, he expected SABIC to maintain its profits compared to the previous year due to the increase in sales volume, despite the increase in feedstock costs.