Dubai: Petrochemicals firm Saudi Basic Industries Corp (SABIC) said on Sunday it expected margins to be under pressure in the fourth quarter as its third quarter net profit fell 67 per cent year-on-year on higher costs and an impairment charge.
SABIC’s net profit fell to SR1.84 billion ($489.62 million) from SR5.59 billion in the third quarter of 2021.
The petrochemicals giant said in a stock exchange filing an impairment provision of SR510 million “was recognized on financial assets,” without giving details.
Average sales prices in the third quarter fell 15 per cent from the second quarter, while sales volumes also dropped 1 per cent in the same period, SABIC said in a statement.
Average sales prices were still up 15 per cent and volumes 11 per cent higher in the first nine months of this year compared to the year-prior period, it added.
Oil giant Saudi Aramco owns 70 per cent of SABIC. SABIC said its “value capture associated” with Aramco since it took the stake in June 2020 was SR3.64 billion riyals, including SR2.09 billion in the first nine months of 2022.
This month, SABIC began commercial operations at its third ethylene glycols plant in Jubail.
“Capital discipline remains a focus area and we estimate that we will end the year with 20 per cent less capital expenditure than planned,” Abdulrahman al-Fageeh, SABIC’s acting CEO, said in the statement.
Fageeh was named CEO on September 28 after former CEO Yousef Abdullah al-Benyan resigned following his appointment as Saudi minsiter of education.