SABIC’s Q2 suffered on Hadeed losses, lower prices: CEO

SABIC’s Q2 earnings fell mainly due to a loss of SAR 578 million incurred by Steel Industry Company (Hadeed), as well as a decline in prices for most of the company’s products, CEO Yousef Al-Benyan said in a conference call on Sunday.

The restructuring of Hadeed, announced last year, was finalized by reducing costs by more than SAR 300 million in 2016 and about SAR 200 million this year.

The restructuring of Saudi Advanced Industries Company (SAIC), however, is still under process with the company Board of Directors and has so far achieved positive results.

Al-Benyan added that SABIC was able to successfully deal with the challenges that arise when competing in the global market, which reflected on earnings in the first half of this year. The company achieved the most growth in the US market and “a location has been selected to build a new project with Exxon Mobil,” he said.

Asia is another critical market that accounts for up to 30 percent of the company’s sales, despite a few challenges, especially in China.

Performance was also healthy in the European markets, where a number of its factories are located, thus minimizing shipping costs. The emerging African market is also important, in terms of the long-term strategic outlook.

The company is still considering potential opportunities in Africa, he added.