SABIC can handle economic cycle of petchem market: CEO

Abdulrahman Al-Fageeh, CEO of SABIC

Saudi Basic Industries Corp. (SABIC) is used to dealing with the economic cycle in the petrochemical market and its fluctuations, CEO Abdulrahman Al-Fageeh said, while also pointing to the company’s experience with market conditions.

SABIC's sales reach includes more than 100 countries, Al-Fageeh said in response to a question by Argaam during the press conference on Q1 2023 financial results.

He stressed that the petrochemicals giant pays close attention to the security and safety of the society and the people. In addition, the focus also remains on the reliability of plants and delivery of products to all customers around the world.

Commenting on the financial results, Al-Fageeh said that the year-on-year (YoY) decrease in sales to SAR 40 billion in Q1 2023, was due to the volume of sales of polymers and agri-nutrients as well as the average prices of SABIC products.

The CEO added that the company's cost of sales decreased by 9% YoY in Q1 2023.

Sequentially, Q1 2023 profit grew due to improved profit margins, mainly driven by a decrease in operating expenses.

He pointed out that SABIC continues to control capital expenditures and will allocate capital for profitable investments.

Demand for the sector’s products witnessed improvement but lower than the company’s expectations, the CEO noted, indicating that SABIC is always closely monitoring growth recovery in global market demand to serve its customers around the world.

The first quarter of 2023 saw an increase in petrochemical production capacities in Asia, since the effects of the COVID-19 pandemic receded, which affected the petrochemicals supplies in the Asian markets.

Al-Fageeh explained that the decline in oil prices helped increase profit margins, however, it did not have a significant impact on prices of end products.

SABIC has non-petrochemical materials such as steel, which affected the average prices of SABIC in the first quarter.

He also pointed out that there is pressure on agricultural products with industrial products seeing a slight growth in Q1, expecting stability in demand for most final industrial products.

The major petrochemical producer posted a 90% slump in Q1 2023 net profit to SAR 660 million, compared to SAR 6.47 billion in the year-earlier period, Argaam reported.