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JEDDAH, 22 March 2005 — Petrochemicals giant Saudi Basic Industries Corp. (SABIC), the Middle East’s largest industry and publicly held company, has announced a one-for-three bonus share issue and an SR15 ($4) per share dividend. SABIC shares surged 6.1 percent to SR545 on the news, driving the official Tadawul All-Shares Index (TASI) to a new record close of 10,174.9 points. These decisions must however be approved by shareholders at the company’s Annual General Meeting next month. The Saudi government owns 70 percent of SABIC shares, with the remaining held by private investors in Saudi Arabia and other countries of the Gulf Cooperation Council (GCC). The company’s financial statement for 2004 reflects record achievements in terms of profits and revenues. The company also became the world’s most profitable chemical company in terms of both net income and return-on-equity. The company recorded net profits of SR14.25 billion, an increase of 112 percent over the prior year, and consolidated sales of SR68.7 billion. Earnings per share increased to SR47 in 2004, compared to SR22 in 2003. Likewise, return-on-equity increased to 31 percent in 2004, compared to 18 percent in the prior year. SABIC also said in a statement it plans to issue an Islamic sukuk bond to “diversify its future funding sources”. The firm did not state its amount or when it would be issued. Mohammed Al-Mady, vice chairman and chief executive officer, said the company will continue to generate excellent results during 2005 in light of economic forecasts, growing global demand for SABIC products, and the company’s continuing growth in production and sales. Al-Mady added that profits realized in 2004 reflect the improvement of the global economy in parallel with the company’s intensive efforts to increase and improve productivity and marketing. He cited the company’s ongoing efforts to minimize the operating costs and establishing a long-term process of interface and liaison with industrial consumers worldwide, making use of the shared services and FANAR Project efficiencies, developing the human resources, improvements in quality control and safety, and environmental protection. The company will further intensify the efforts of its research and technology unit to improve processes, and continue production and expansion projects to reach an annual production goal of 60 million tons by 2008. SABIC has recently awarded a program management services contract for engineering, procurement and construction management of the Sharq 3rd Expansion Project to Foster Wheeler Energy Ltd., UK. Al-Mady said, “After the expansion, Sharq will be one of the world’s largest petrochemical sites. Production following the expansion is scheduled to begin before the end of 2008, boosting SABIC’s contribution to the national economy and enhancing its competitiveness worldwide.” SABIC is currently the world’s number two in Ethylene Glycol production and will become number one upon completion of several ongoing expansion projects. The company is also third in Polyethylene production, and fourth in Polyolefins overall. SABIC’s main plants are at the Gulf industrial site of Jubail and the Red Sea Yanbu complex but it has moved into Europe and plans further expansion in Asia and Latin America. Officials have said SABIC investment in China could reach between $2 billion and $5 billion. The company has also recently approved an SR24 billion budget for projects to be completed within Saudi Arabia by 2008. SABIC employs more than 16,000 people worldwide, most of them based in Saudi Arabia. |
