Saudi Basic Industries Corp 2010.SE (SABIC), the world’s fourth-biggest petrochemicals company, reported an 18.6 percent drop in fourth-quarter net profit on Sunday, citing lower output and sales. SABIC made a net profit of 3.67 billion riyals ($979 million) in the three months to Dec.31, down from 4.51 billion riyals in the year-earlier period, the company said in a bourse statement.
SABIC, which aims to be the Number 3 petrochemicals producer, attributed the fall in profit to planned turnarounds at certain plants which hit output, and also noted that 2016’s quarterly profit was helped by the recognition of deferred tax assets. A turnaround is a scheduled event where an industrial plant is shut down to be revamped.
SICO Bahrain had projected a net profit of 5.34 billion riyals and NCB Capital had a forecast of 5.41 billion riyals for net profit in the fourth quarter.
The company’s results are closely tied to oil prices and global economic growth because its products — plastics, fertilisers and metals — are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.
Last week, SABIC bought a 25 percent stake in Clariant (CLN.S), ending the Swiss speciality chemical group’s fight with activist investors but raising further questions about its future.
Reporting by Marwa Rashad; Writing by Saeed Azhar; Editing by Tom Arnold