Mohamed Al-Mady, chief executive of the Gulf's most valuable firm, said on Tuesday sales in the first quarter reached SR45 billion ($12 billion), down 6 percent on the first quarter.

Al-Mady said there was a 2 percent decline in production for the first quarter from the previous quarter due to halting of some operations, but was optimistic about future results as demand remained high.

"We are very optimistic that we will continue on the same demand for the rest of the year," Al-Mady told Reuters a day after the group posted a forecast-beating 42 percent jump in first-quarter profit.

Asked if second-quarter results would be better than the previous quarter, Al-Mady said: "Yes, it is possible if things continue the same way."

Earlier this year, SABIC said it expects higher sales and profitability through 2011 and 2012 as petrochemical prices return to pre-crisis levels and further capacity is added.

"Prices (of petrochemical products) are stable, especially with the rise in energy prices and the shortage in products," Al-Mady said.

SABIC has an advantage over rivals in terms of profitability because it pays a government-subsidized 75 cents per million BTU (British Thermal Unit) for gas feedstock, a fraction of the cost on international markets.

The firm reiterated on Tuesday that operations at its affiliate Saudi Kayan Petrochemicals will start commercial production in the second half.

"All plants will be finished sometime in 2012 but the majority of the plants will be commercially operational in (the second) half of this year," Al-Mady said.

Al-Mady also said SABIC is looking to expand into the performance chemicals segment in 2011. He said some plants would be built in Saudi Arabia and others outside.