SABIC

Performance indicators

2023

Loss for the year $739 million

Saudi Basic Industries Corp. (Sabic), fell short of analysts' profit forecasts and instead reported a 2023 loss of 2.77 billion riyals (739 million), compared dollars with a profit of 16.53 billion in 2022. Revenue also declined from a year ago as average prices and sales volumes declined.

Saudi Arabia's leading chemical producer said there was "significant uncertainty" in the industry as it grapples with slowing demand.

Decrease in profit in the second quarter by 86% to $315 million

Profits at the world's largest chemical company are falling as the global economy slows. Sabic's profit in the second quarter of 2023 fell by 86% to 1.18 billion riyals (315 million dollars). UNITED STATES). The company says the global economy is "constantly slowing down."

2022:94% profit decline in Q4

Sabic said net income in the fourth quarter of 2022 fell to 290 million riyals ($78 million), down 94% from last year and the worst result since the height of the COVID-19 coronavirus pandemic in mid-2020.

Sabic said profit margins would remain low after its revenues fell due to a global economic slowdown and weakening demand for plastics and building materials.

The company's results were similar to those of rivals like BASF, which had announced 2,600 job cuts days earlier, and Dow Inc.

History

2020: Saudi Aramco buys SABIC for $69bn

On June 14, 2020, the sale of SABIC to the world's largest oil company Saudi Aramco was closed. The latter, according to the terms of the agreement, received a 70% stake in SABIC for $69 billion. 30% of SABIC shares remained under the control of the Saudi sovereign fund (Public Investment Fund, PIF).

It is assumed that thanks to the takeover of SABIC, the fourth largest petrochemical company in the world, Saudi Aramco will be able to diversify its business and enter new markets.

The world's largest oil giant Saudi Aramco bought the petrochemical company SABIC for $69 billion

In mid-April 2020, it became known that Saudi Aramco was negotiating  with the banks over a loan of $10 billion to finance the purchase of a controlling stake in SABIC. And in May, the media reported that Saudi Aramco is exploring the possibility of reducing the amount of the transaction to buy SABIC.

By mid-June 2020, Saudi Aramco still has plans to increase oil refining by 2030 from 5 million barrels per day to 8-10 million barrels per day, and up to 3 million barrels. will be petrochemical products. It was within this strategy that a deal was struck to buy SABIC's controlling stake. 

Minister power engineering specialists Saudi Arabia Khaled al-Faleh said Saudi Aramco intends to strengthen its petrochemical division and is eyeing assets in the sector around the world. He also called Russian companies interesting in this sense.

For PIF, this deal is also important, as it gives the fund more cash to invest in the implementation of the Vision 2030 program. The main goal of this program is to diversify the Saudi economy by reducing the kingdom's dependence on oil revenues. According to the program, the country's economy will be gradually reoriented to other industries, in particular, to the development of information technology, health care and tourism.^[1]

Notes