Dubai: Chemicals maker Saudi Basic Industries Corp. expects sales and earnings to increase this year after it beat analysts' estimates by making a profit in 2020.
The Riyadh-based firm, controlled by Saudi Aramco, said it sees the global roll-out of coronavirus vaccines leading to a 2 per cent to 5 per cent gain in revenue this year. Pretax income will be "moderately higher" than in 2020, while capital expenditure will be similar, Sabic said in a results statement.
Sabic earned net income of 40 million riyals ($10.7 million) in 2020, down sharply from 5.2 billion riyals in 2019. Analysts surveyed by Bloomberg had expected a loss of almost 300 million riyals after the pandemic caused demand for chemicals products to sink.
Sabic's net income between October and December was 2.2 billion riyals, more than double the figure for the third quarter.
"The fourth quarter benefited from sustained economic recovery," said Chief Executive Officer Yousef Al-Benyan. "Distributing competitive dividends to our shareholders continues to be paramount and this is supported by our firm commitment to maintaining capital discipline, as well as our ability to uphold a strong balance sheet and credit rating."
In December, the company's board announced a dividend of 1.5 riyals per share for the second half of 2020, unchanged from the first half.
Sabic's stock fell 0.4 per cent to 102.20 riyals in early trading on Sunday. It's risen 0.8% this year and is up 65% since its trough in March, during the first wave of the virus, of 62 riyals.
Aramco bought 70 per cent of Sabic last year from the Saudi sovereign wealth fund for $69 billion. The takeover will result in as much as $1.8 billion of "annual value creation and synergy" by 2025, Sabic said.
The company is seeking to list its specialty unit through an initial public offering and has has shortlisted banks including Citigroup Inc. and Morgan Stanley for roles on the deal, Bloomberg reported this month.
The unit generates about $2 billion of revenue annually. Its establishment as a standalone entity last year was a "major milestone that should support the company's ambitions to be a leader in the specialty chemicals industry," Sabic said.