Saudi SABIC’s quarterly profit drops 85 percent on lower sales prices

Saudi SABIC’s quarterly profit drops 85 percent on lower sales prices

Saudi Basic Industries Corp (SABIC), one of the world’s biggest petrochemical companies, said on Thursday its second-quarter net profit slumped 85 percent on lower average sales prices.

The company posted net income of 1.18 billion riyals in the three months to June 30, compared with 7.93 billion riyals a year earlier.

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“The global economy is continuously slowing down as a result of tightening monetary policies to confront inflation, leading to weaker demand and a decrease in the average selling prices of the company’s products as well as lower quantities sold,” SABIC said in its earnings release.

SABIC’s earnings are closely related to oil prices and global economic growth as its products - plastics, fertilizers and metals - are used extensively in construction, agriculture and industry, and in making consumer goods.

Chemicals giant Dow Inc last month reported a 70 percent drop in second-quarter profit and warned that the macroeconomic environment would remain challenging.

Abu Dhabi’s Borouge, a polyefins producer, also last month reported a 53 percent drop in net profit to $229 million and said polyolefin markets remain challenging, with pricing expected to operate within a narrow band of volatility.

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