RIYADH: Saudi Basic Industries Corp., a leading petrochemical firm, announced a net profit of SR1 billion ($266.27 million) for the third quarter of 2024, significantly better than the SR2.87 billion loss recorded in the same period the previous year.
SABIC credited its improved performance to several factors, including an increase in operational income by SR797 million, supported by a higher gross profit margin, despite increased operating costs.
The company's revenue increased by 3 percent year-on-year to SR36.88 billion, mainly due to higher average selling prices, even though sales volume slightly decreased.
Additional gains were realized from the divestment of the Functional Forms business and favorable currency exchange rate fluctuations.
According to the London Stock Exchange Group, the third-quarter profit fell short of analyst forecasts of SR1.6 billion, as reported by Reuters.
A significant factor was the reduction in losses from discontinued operations, which amounted to SR3.3 billion, primarily due to a reassessment of the fair value of Saudi Iron and Steel Co. (Hadeed).
The reclassification of Hadeed as a discontinued operation will persist until the sale is finalized, as previously announced by the company.
However, when compared to the second quarter of 2024, net profit decreased from SR2.18 billion, mainly due to a lower gross profit of SR194 million, attributed to softer selling prices and higher feedstock costs.
Operating expenses also increased by SR223 million, and profits from associates and joint ventures declined by SR313 million, following a fair value assessment related to the sale of shares in Alba, announced in September.
Despite these challenges, SABIC's total revenue for the first nine months of 2024 reached SR105.28 billion, with a net profit of SR3.43 billion, a significant improvement from the SR1.04 billion loss in the same period last year.
This turnaround was aided by reduced losses from discontinued operations and lower Zakat expenses by SR1.05 billion, resulting from regulatory-driven provision adjustments in June.
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