Saudi Arabia’s top chemicals maker reported a loss after selling its steel unit and as weaker demand hits the industry.
Saudi Basic Industries Corp., or Sabic, said the loss for the third quarter was 2.88 billion riyals ($768 million), compared with a 1.84 billion-riyal profit a year earlier. It said there was a one-time loss after a revaluation following the sale of Saudi Iron and Steel Company to the Public Investment Fund.
The quarterly results also highlighted the struggle for chemical companies as they face a decline in global demand, particularly from China, and lower prices for their products. High interest rates and inflation are keeping the market fragile, with Sabic expecting margins to remains under pressure for the rest of this year. The shares are down 14 per cent this year.
The company’s net income from continuing operations fell 67 per cent from a year earlier, and the stagnation in consumption of chemicals led to a decrease in average selling prices, it said in a statement Thursday.
The slowdown is hitting chemical companies elsewhere too. German firm BASF SE, which this week reported sales fell across all geographical areas, said it sees 2023 earnings coming in at the lower end of its guidance.
Saudi Aramco, the world’s biggest oil exporter and majority owner of Sabic, reports earnings on November 7.