Fitch affirms SABIC’s rating at ‘A+’ with stable outlook

Logo of Saudi Basic Industries Corp. (SABIC)

Fitch Ratings affirmed Saudi Basic Industries Corp. (SABIC)’s long-term rating at “A+” with a stable outlook, matching its parent company, Saudi Aramco.

In a report, the agency said the rating reflects SABIC’s low leverage, large-scale operations, cost-competitive production, conservative financial policies, and strong liquidity position.

Fitch expects SABIC’s net debt/EBITDA ratio to rise to around 1x by 2029, up from a net cash position in 2025, driven by higher capital expenditure on growth projects, global chemical oversupply, and regional disruption pressures.

It noted that SABIC’s shipments fell 33% quarter-on-quarter (QoQ) in Q2 2026 due to disruptions in the Strait of Hormuz. However, the company increased shipments through Saudi Arabia’s western coast and boosted regional sales.

Higher chemical prices offset higher logistics costs, limiting the QoQ EBITDA decline to 18%, Fitch said, adding that shipment volumes are expected to recover from Q3 2026.

Fitch expects EBITDA to decline 22% in 2026 to around SAR13 billion, before gradually rising to SAR 22 billion by 2029, supported by improving market conditions and the company’s $3 billion transformation plan.

The agency noted that global chemicals oversupply will continue to pressure profit margins over 2026–2029, with markets expected to gradually improve as China slows the addition of new production capacity from 2028.

Regarding investments, Fitch expects SABIC’s capital expenditure to reach SAR 10 billion in 2026 and around SAR 13 billion annually over 2027–2029, as the company implements expansion projects in Saudi Arabia and China.

SABIC has a strong liquidity position, with cash and short-term investments totaling around SAR 40 billion by the end of June 2026, compared to SAR 3.2 billion in current debt, the agency said.

Fitch affirmed that the stable outlook reflects its expectation that SABIC’s credit metrics will remain strong, noting that any change in Saudi Aramco’s credit rating would affect SABIC’s rating.