RIYADH: Saudi Basic Industries Corp. (SABIC) said on Sunday it expects positive growth in the second half of this year, backed by an increase in production and enhanced global economic outlook.
The comments came after SABIC reported an 81 percent leap in second-quarter net profit, citing higher selling prices and a jump in sales volumes.
The first half of 2018 was “very positive” and SABIC expects the second half of the year to be “equally positive,” CEO Yousef Al-Benyan told a news conference.
SABIC has been a focus of investor attention after Reuters reported earlier this month that Saudi national oil giant Aramco aimed to buy a stake in SABIC, possibly taking the entire 70 percent holding owned by Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF). Aramco subsequently confirmed the report.
Benyan said on Sunday that talks on the potential acquisition of a stake in his company are taking place solely between Aramco and PIF.
“Hard to expect anything in this regard — Aramco-PIF talks are between an owner and a future investor,” Yousef Al-Benyan told a news conference. “I can assure you we have trust in our regulators.”
SABIC posted a net profit of SR6.70 billion ($1.79 billion) in the three months to June 30, up from SR3.71 billion in the year-earlier period, beating average analyst forecasts of a 5.8 billion riyals net profit.
Benyan said the company’s production rose about 1.5 million tons in the first half of the year and is expected to rise to three million tons by year-end.
Quarterly sales climbed 26 percent from a year earlier to SR43.28 billion, and were up three percent from the previous quarter.
SABIC’s results are closely tied to oil prices and global economic growth because its products — plastics, fertilizers and metals — are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.
The petrochemical giant has plans to expand its presence in global markets; specifically in North America, China and North Africa, Benyan said, adding that the company is looking at various options, without giving further details.
In Europe, the company is still committed to its investment in Clariant, and is awaiting antitrust approvals for acquiring a 25 percent stake in the Swiss speciality chemical maker which was announced in January, Benyan said.
Earlier this month, Clariant CEO said his company’s update on its ties with SABIC is likely to be delayed as antitrust approvals take longer than expected.