Saudi Basic Industries Corp(Sabic), the world’s biggest petrochemicals group by market value, reported a 35-per cent drop in quarterly profits on Wednesday due to lower prices and production, missing analysts’ estimates.
Sabic, which is 70-per cent state-owned, said second quarter net profit was 5.3 billion riyals (Dh5.18 billion) for the quarter ended June 30, down from 8.1 billion riyals in the prior-year period.
Analysts had forecast, on average, profit of 6.58 billion riyals, in a Reuters poll. It declared a 2-riyals per share dividend on Wednesday, for the first half of 2012. The bellwether Middle East conglomerate, which supplies chemicals, industrial polymers, fertilisers and metals globally, blamed the lower profits on a combination of weaker product pricing, the impact of plant maintenance on production and sales volumes as well as higher raw materials costs. Sabics profits had fallen in the two previous quarters amid slipping demand in China. But record earnings in the second and third quarter of 2011 helped it achieve a bumper year. The conglomerate’s products are used in a wide variety of industries, from car manufacture to house construction and cheap retail goods making it highly sensitive to movements in the global economy.
Sabic enjoys a comparative advantage over some other chemical producers because much of its feedstock comes from subsidised natural gas supplied by the government. Sabic said in June it was repaying an 8 billion-riyal Islamic bond, or sukuk, ahead of time. The company’s shares fell 0.3 per cent on Tuesday on the Saudi bourse to close at 86.25 riyals, hovering near Sunday’s 15-month closing low of 85.25 riyals.
Bank Dhofar, Oman’s third-largest bank by market capitalisation, swung to a net profit in the first half, after taking a one-off provision in the same period last year which pushed it into the red. The lender made a profit of 19.5 million riyals (Dh185.4 million)) in the six months to June 30, according to a statement to the Muscat bourse on Wednesday. In the same period last year, the bank reported a 4.6 million riyals loss. First-half profits in 2011 were hit by a 26.1 million riyals provision the bank took after it lost a court case with HSBC Bank Oman and Ali Redha Trading and Muttrah Holding over the ownership of 1.9 million Bank Dhofar shares. The second-quarter profit for Bank Dhofar was 10.1 million riyals, according to Reuters calculations. The lender only published first-half results in 2011, meaning there was no quarterly breakdown to enable a comparison to be made.
Kuwait company rules
The Kuwaiti ministry of commerce and industry will soon revoke the licences of companies that have failed to submit financial results for more than one year without providing convincing justification, Kuwait-based Al Rai daily reports Wednesday citing an official. Mansour Al Saeed, assistant undersecretary of the ministry’s Legal Affairs Department, told the paper that on Tuesday he submitted a note to the minister proving that there are legal grounds for withdrawing the licences. Saeed’s legal opinion ends a long period of discussions about the legitimacy of revoking the licences in such cases, the daily said. Saeed told Al Rai that the ministry has prepared a list of the offending companies that will be barred from its list of licensed companies once the minister approves the decision. According to the ministry’s figures there are 367 shareholding companies that their licences could be withdrawn by this decision, the daily reports.
Mena Real Estate Co
Kuwait’s Mena Real Estate Co (MREC) on Tuesday said it had signed a memorandum of understanding with Bahrain’s Aqari Real Estate Co to develop a plot of land there at an estimated cost of 2.5 million Bahraini dinars (Dh24.2 milloin). The plot of land, which will be used for the construction of a commercial and residential complex, covers an area of nearly 8,500 square metres in Bahrain’s East Riffa region, MREC said in a statement posted on the Kuwait bourse website. Aqari will contribute to the financing of the project and a joint venture company will be set up to implement it, the property developer added. The stake of each partner and the capital of the joint venture will be fixed once the final license for the project is given, according to the statement.
Kuwait’s Kipco Asset Management Co (Kamco), said on Tuesday it had sold its entire 6.22 per cent stake in the local Advanced Technology Co for 7.84 million Kuwaiti dinars (Dh102.03 million). Kamco, which is the investment arm of Kuwait’s Kipco group, said it didn’t book any profit on the divestment. The company said in a statement posted on the Kuwait bourse website that it sold its 9.33 million shares in Advanced Technology for 0.84 dinars each. The divestment was carried out in two transactions, one in June, and the other in early July, according to the statement. Advanced Technology, which is listed on the local bourse, is mainly involved in the distribution of medical, pharmaceutical, and veterinary products, according to Zawya.com data.