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
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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)


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.