SABIC’s CEO says hard to predict future market situation amid COVID-19 challenges

Yousef Al-Benyan, Vice Chairman and CEO of Saudi Basic Industries Corp. (SABIC), said it is difficult to predict the market situation going forward, amid the COVID-19 challenges and the emergence of the second wave in some countries.

Prices have not yet returned to the normal level of 2019, Al-Benyan told Argaam on the sidelines of the press conference held today to discuss the third-quarter 2020 results.

The prices of basic petrochemical products and agri-nutrients rose by 13% and 4% on average, respectively.

Global prices are declining, Al-Benyan pointed out, adding that the prices of ethylene glycol and methanol shed nearly 18% and 23%, respectively, when compared to 2019. On the other hand, polyethylene added 2%, compared to the same period last year.

SABIC is still focusing on enhancing its plant reliability, improving production, fulfilling client demand to boost sales, as well as reducing administrative and operating expenses.

Moreover, revenues from SABIC's subsidiary, Saudi Iron and Steel Company (Hadeed) climbed 29% year-on-year (YoY) to SAR 2.18 billion in Q3 2020, amid a decline of 7% YoY in average selling prices and a 36% YoY rise in sales volumes.

Sales volumes increased on pent-up demand, on easing of coronavirus lockdowns and improved macroeconomics, Al-Benyan explained.

Elsewhere, Al-Benyan said the strategic crude oil-to-chemicals (COTC) complex is an opportunity for integration between Saudi Aramco and SABIC. It can benefit from the plants located in Yanbu.

Saudi Aramco and SABIC believe in the project restructuring to capitalize on the current conditions and capacities, and also to invest in COTC, which will have a positive impact on SABIC and Saudi Arabia, the CEO concluded.

SABIC reported a rise of 47% in net profit after Zakat and tax to SAR 1.09 billion in Q3 2020, compared to a net profit of SAR 0.74 billion a year earlier, Argaam reported.