SABIC's net profit falls 29% to SR3.08bn in Q4

Updated 17 January 2016

SABIC's net profit falls 29% to SR3.08bn in Q4

DUBAI: Saudi Basic Industries Corp. (SABIC), one of the world's largest petrochemicals groups, reported a 29.4 percent drop in fourth-quarter net profit on Sunday due to lower prices for its products, particularly in its metals division.
It was the sixth straight quarter of falling profits for the company, which has been hurt by the fall in oil prices since mid-2014.
SABIC made a net profit of SR3.08 billion ($821 million) in the three months to Dec. 31, down from SR4.36 billion in the year-earlier period, the company said in a bourse statement.
Analysts polled by Reuters had on average forecast SABIC would make a quarterly profit of SR4.18 billion. Its metals business, Saudi Iron and Steel Co. (Hadeed), made a net loss of SR1.1 billion compared with the same quarter of 2014, despite cost cuts.
Hadeed will cut costs until the end of 2016 because it does not expect global steel prices to recover for two to four years, a SABIC executive told Reuters in November.
Petrochemical product prices are closely linked to those of oil, while Saudi firms receive subsidized energy and feedstock.
That means high oil prices give them better margins and a competitive advantage over rival manufacturers from nonoil producing regions, although this benefit diminishes as crude prices decline. Oil prices are at around 12-year lows.
Three of SABIC's affiliates, including Saudi Arabia Fertilizers Co., reported profit falls on Thursday.
SABIC's fourth-quarter results were also dragged lower by a SR375 million impairment against equipment at its Ibn Rushd unit, the statement said.
Arabian Industrial Fibers Company is 45.19 percent owned by SABIC, with the state-owned Public Investment Fund and other regional investors owning the balance, according to SABIC's website.
SABIC disclosed its earnings after market hours. Its shares closed down 3 percent, outperforming the wider market which fell 5.4 percent after a slide in oil prices on Friday.


Leaders descend on Beijing for Bloomberg problem-solving forum

Updated 21 November 2019

Leaders descend on Beijing for Bloomberg problem-solving forum

  • The two-day event aims to encourage solutions from the private sector to some of the big challenges the global economy faces today
  • Some 500 senior leaders will attend the gathering, of which about 200 will come from Chinese institutions

Thought leaders from the business world and the global political scene are descending on the Chinese capital Beijing for the New Economy Forum (NEF) run by the information and media giant Bloomberg.

The two-day event aims to encourage solutions from the private sector to some of the big challenges the global economy faces today — trade, climate change, technology and financial volatility. It will also prioritize issues of inclusion, urbanization and governance.

Justin Smith, chief executive officer of Bloomberg Media, told Arab News — which is a media partner for the event — that some 500 delegates would attend the forum, with about 200 coming from institutions within China.

“The reason we’re bringing people together is to produce a platform for discussion between people who represent the new global economy. There is a whole new class of people from Asia, the Middle East, Africa and Latin America who are not represented well in the ‘legacy gatherings’ that take place, which are typically more American and European oriented.

“The idea is to enable people at a principle level — chief executives, ministers, leaders — to have substantive conversations to find solutions to global problems and help mitigate the big issues the world faces. This is not just a talking shop,” he said.

Some 500 senior leaders will attend the gathering, of which about 200 will come from Chinese institutions. “There will be a big Chinese involvement, but this is because of how important China is in the global economy. This really is a one-of-a-kind gathering,” Smith said.

The opening keynote will be delivered by a senior member of the leadership of the Peoples Republic, whose identity has not been officially disclosed amid tight security at the conference venue outside Beijing city center.

While the issue of trade wars between China and the US will be a big issue at the gathering, Smith said that it was not the most important one. “This is not a US-China gathering — it is a global gathering located in Beijing,” he said.

Americans attending the event include former secretary of state Henry Kissinger, as well as Hank Paulson, who was Treasury secretary during the global financial crisis, and Janet Yellen, former chair of the US Federal Reserve.

There is a significant delegation from the Middle East, including Saudi business leader Lubna Olayan, as well as executives and policy-makers from other Arabian Gulf countries.

“The Middle East’s role in the new economy is critical. It has increasingly deep ties with China, but also has strong links with Europe and the West. They are in between western capitalism and state capitalism,” Smith said.