JEDDAH: Saudi Basic Industries Corporation (SABIC) suspended most of its capital expenditure after recording losses of SR950 million ($203.9 million) in the first quarter,  its CEO said Monday, amid a slump in oil prices and the emergence of the global COVID-19 crisis.

SABIC, which is the Middle East’s biggest petrochemical company, recorded total sales of SR30.83 billion during the first quarter of this year, a decrease of 18 percent compared to the same period in 2019.

“SABIC is committed to capital discipline and maintaining a strong balance sheet and has suspended all capex, but non-discretionary capex for safe and reliable operations and late-stage projects,” CEO Yousef Al-Benyan said in a statement.

He said that the impact of coronavirus, in terms of the decrease in demand and prices, would be more obvious in the second quarter.

He expected the current situation to continue until the end of 2020 alongside the ramifications of COVID-19 on global economic growth and oil prices, affecting the price of petrochemical products.

SABIC said that, despite the improved business climate in China, it anticipated negative impact elsewhere in the world on demand and market sentiment in the second quarter of 2020 and potentially later in the year. It added to the oversupply in the company’s key products which would result in further pressure on product prices and margins.

It allocated asset impairment provisions of SR1.1 billion, including SR713 million for a polymer plant in Cartagena, Spain. The decision was partially attributed to the planned turnaround at SABIC’s plants worldwide.