JEDDAH, 17 July 2005 — Saudi Basic Industries Corporation announced yesterday in a statement posted on the Saudi stock market website bulletin that it will be paying dividends to its shareholders for the first half of 2005 at SR8 per share. It will begin payments on July 23, 2005 for shareholders officially registered by June 30, 2005 through all the branches of the National Commercial Bank.
The statement did not mention the company’s profits for the mid-year but it has stated previously that the dividend amounted to SR3.2 billion. In 2004, the petrochemical giant posted profits of SR3.8 billion, an increase of 113 percent from the year before, as a result of high global prices for its products.
Rumors among traders is that the profits for this year are less than before, which might be confirmed by the SR8 per share dividends compared with last year’s SR10 per share for the same period. These negative expectations were being reflected in the market downward indicator during the last few days and with this announcement, the market might drop further.
SABIC also announced yesterday that it has signed a letter of intent on Thursday with the Japanese company Toyo to design, import and establish glycol ethylene production factory at Yansab’s complex with an annual production capacity of 700 thousand metric tons.
SABIC’s Vice Chairman Mohammed Al-Mady said that this is the third factory which the company had signed contracts for as part of its complex located at Yanbu Industrial City on the West coast. The statement did not say what the value is for the deal.
The Yanbu National Petrochemicals Company (Yansab) is SABIC’s newest announced subsidiary, which has a planned production capacity of four million tons per year of ethylene, propylene, polyethylene and other petrochemicals.
Crown Prince Abdullah recently laid the cornerstone for Yansab, owned 55 percent by SABIC and 10 percent by 17 Saudi and Gulf companies; 35 percent of the capital will be floated in an IPO. The investment in this project is SR19 billion and it will be completed by the end of 2007 and employ 1500.
The ceremony was conducted during the launch of Yanbu-II, the giant project invested by the Royal Commission of Yanbu on 66 square kilometers costing SR12 billion for the basic foundations.
Yansib complex represents part of SABIC’s strategic plan to increase its contribution to the national development programs, bolster its competitive abilities in international markets and achieve its ambitions of leadership among the largest international petrochemical companies.
