RIYADH, 22 July — Saudi Basic Industries Corporation (SABIC) posted a net profit of SR1.502 billion ($400.43 million) in the first half of 2001, down 27.1 percent from the same period of last year, the company announced yesterday.
The decline came despite a 33 percent increase in sales to SR16 billion ($4.27 billion), from SR12 billion ($3.2 billion) last year, SABIC’s Deputy Chairman and Managing Director Muhammad Al-Madi said.
“The drop is attributed to a decline in the prices of most products and to a rise in the costs of raw materials,” Madi explained in a statement.
“This trend is likely to continue until the end of this year. Higher prices of gas feedstock and the shortage of ethane also contributed to the fall in SABIC’s profit,” he said.
However, Madi hoped that the global demand and prices would start increasing early next year. He said there was a seven percent increase in quarterly earnings, with a net profit of SR778 million ($207.41 million) for the second quarter.
He said production was up 25 percent at 17.1 million tons and sales jumped 26 percent to 13 million tons, compared to the first six months of 2000.
SABIC, with a paid-up capital of $4 billion and total assets of more than $21 billion, has 18 factories in Saudi Arabia mainly for petrochemical products. The industrial giant, founded in 1976, posted a $968 million profit in 2000, an increase of 112 percent over the previous year.
SABIC recently signed a three-year agreement with Huvis of South Korea to supply it with 200,000 metric tons per year of mono-ethylene glycol.
