SABIC says challenges remain, views Aramco deal positively

SABIC made a net profit of 3.24 billion riyals ($864 million) in the three months to December 31. (AFP)
Updated 27 January 2019
0

SABIC says challenges remain, views Aramco deal positively

  • SABIC posted a 12.4 percent drop in fourth-quarter profit compared to the year earlier period
  • Discussions are ongoing for growing SABIC’s business in North America

RIYADH: Saudi Basic Industries Corp. (SABIC) expects to face challenges this year due to uncertainty over the impact of a global trade war on the United States and China, its major markets, the company’s chief executive said on Sunday.
However, the world’s fourth-biggest petrochemicals company said it has the ability to deal with such challenges and started to see stabilization in prices of some products after a steep decline toward the end of 2018.
SABIC reported a 12.4 percent drop in fourth-quarter profit compared to the year earlier period, missing analyst forecasts. The company attributed the fall to lower average selling prices and a decrease in the share of results of associates.
“We’ve seen stabilization for some of the prices, still there are some challenges ahead of us,” Chief Executive Yousef Al-Benyan told a news conference in the Saudi capital.
SABIC will continue to boost its presence in its major markets — the US and China, he added.
“We are part of the global economic system, we are always affected by challenges but we are able to adapt with these challenges in the best way.”
He said SABIC will continue to raise its presence in Africa, as it is seen a very promising market.
SABIC’s biggest shareholder, the Public Investment Fund (PIF), is in talks to sell its majority stake to Saudi national oil giant Aramco <IPO-ARMO.SE>.
Benyan said he views Aramco’s move to “positively,” but further details are a matter for PIF and Aramco, which aims to become a global leader in chemicals.
He added the company will determine later if it needs to increase its 24.99 percent stake in Switzerland’s Clariant after the two companies decided to merge their high-performance materials businesses.
SABIC made a net profit of 3.24 billion riyals ($864 million) in the three months to Dec. 31, down from 3.7 billion riyals in the year-earlier period, the company said in a statement to the stock exchange.
That was lower than the average forecast of three analysts polled by Refinitiv, who expected SABIC to post a net profit of 4.92 billion riyals.
Shares of SABIC were trading 0.3 percent higher in late morning trade, recovering earlier losses.
SABIC results are closely tied to oil prices and global economic growth because its products — plastics, fertilizers and metals — are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.
In 2018, US West Texas Intermediate crude (WTI)futures slumped nearly 25 percent, while Brent tumbled more than 19.5 percent. ($1 = 3.7505 riyals)


Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

Updated 19 June 2019
0

Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

  • British Airways owner IAG signs letter of intent to buy 200 of its 737 MAX jets
  • Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes

PARIS: Airbus, reeling from the potential loss of a major customer for its best-selling A320neo as British Airways owner IAG placed a lifeline order for the grounded 737 MAX, prepared to hit back with more orders for its A321XLR on Wednesday.
The planemaker has been negotiating with US airlines investor Bill Franke whose Indigo Partners has also been known to place orders for multiple airlines within its portfolio and could reel it in for the Paris Air Show, industry sources said.
Airbus declined to comment.
After weathering intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.
The surprise order lifted the energy of a previously subdued Paris Airshow, where the talk had been of the possible end of the aerospace cycle, given the issues at both Boeing and Airbus as well as geopolitical and trade tensions around the world.
Australia’s Qantas Airways said on Tuesday it would order 10 Airbus new A321XLR jets and convert a further 26 from existing orders already on the Airbus books.
Airbus is also in talks with leasing company GECAS and has been trying to secure an eye-catching order for the A321XLR from American Airlines, though the world’s largest carrier does not typically make announcements at air shows.
Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes.