RIYADH, 24 October 2007 — The Saudi Basic Industries Corporation (SABIC) has reported a net profit of SR20.2 billion for the first nine months of 2007, an increase of 42 percent, compared to the SR14.2 billion net profit in the same period last year.
The company’s total production during the first nine months of 2007 stood at 40.9 million metric tons, compared with 36.3 MMT in the same period last year, an increase of 13 percent. Sales rose to 32.6 MMT compared with 28.9 MMT in the same period last year, an increase of 13 percent.
Revenues were SR86.5 billion, an increase of 36 percent over the revenues generated in the same period last year.
SABIC said in a statement yesterday that for the third quarter of this year, its profit increased 37 percent to SR7.4 billion from SR5.4 billion in the same period last year and up 14 percent from SR6.5 billion recorded in the second quarter of 2007.
Prince Saud ibn Abdullah ibn Thunayan Al-Saud, president of the Royal Commission for Jubail and Yanbu and SABIC chairman, said: “The company reported a SR29.6 billion operating profit for the last nine months of 2007 compared to SR21.6 billion in the same period last year, an increase of 37 percent. The profit per share price for the current period amounts to SR8.06 versus SR5.67 in the same period last year.”
SABIC is one of the world’s 10 largest petrochemicals manufacturers. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers, as well as the fourth-largest polyolefins producer.
According to Houston-based Chemical Market Associates Inc. (CMAI), which has been consulting for the chemical industry since 1979, Asian prices for ethylene ranged from $1,250 per ton to $1,300 per ton in the third quarter, compared with $1,100 per ton to $1,200 per ton in the year-earlier period. Ethylene is a base chemical used to make plastics such as polyethylene for textiles or computer covers.
Mohamed Al-Mady, SABIC vice chairman and chief executive officer, said: “Higher profits in the first nine months of 2007 reflect the improvement in the prices of most key products in line with the increase of productivity as a result of the added capacities from a number of expansion projects going on-stream.
These included the ethylene glycol plant at Jubail United Petrochemical Company (United), the reinforced steel plant at the Saudi Iron & Steel Company (Hadeed), and urea and ammonia plants at Saudi Arabian Fertilizer Company (Safco).
In addition, we added production from the SABIC UK Company following the acquisition of Huntman’s European base chemicals and polymers business in the United Kingdom at the end of 2006.”
Corporate consolidated financial statements for the third quarter included the results of SABIC Innovative Plastics Company (SIP), which was established at the end of August 2007 after the completion of the purchase of GE Plastics for $11.6 billion.
The full costs of finance will be charged to the new company.
SABIC’s profit rose to a record SR20.3 billion ($5.4 billion) in 2006, a 6 percent increase on 2005. Sales revenues totaled SR86.3 billion ($23 billion) in 2006, the highest revenues achieved by the company since its inception in 1976.