Saudi Basic Industries has successfully returned to profitability in the third quarter, experiencing a 3% increase in revenue on a year-over-year basis, driven by stronger sales volume. For the quarter ending September 30, the petrochemicals manufacturer reported a net profit of 1 billion Saudi riyals, a significant rebound from the previous year's loss of 2.88 billion riyals.
This positive shift is attributed to a stronger income from operations and a reduced net loss from discontinued operations. However, the profits did see a decline from the prior quarter, which recorded a profit of 2.18 billion riyals. "Overcapacity continues to weigh on the market," stated Chief Executive Abdulrahman Al-Fageeh, emphasizing that the "current utilization rates remain below long-term averages." In terms of revenue, the third quarter achieved annual growth, rising from 35.98 billion riyals to 36.88 billion riyals as improved average selling prices helped counteract dips in sales volume.
Notably, the petrochemicals segment recorded a 2% increase in revenue, totaling 34.08 billion riyals, thanks to robust sales of polyethylene and polypropylene. Meanwhile, revenue from the agri-nutrients sector surged by 17% to 2.80 billion riyals, bolstered by rising market prices. Looking towards the future, the company has laid out a forecasted expenditure of between $3.3 billion and $3.9 billion for 2024, with a long-term emphasis on strategic portfolio optimization and the restructuring of underperforming assets among its other objectives. "We will continue to optimize our portfolio to maximize our shareholder returns, focusing on enhancing returns from our core business and reallocating capital to higher-margin opportunities.
The divestment of Hadeed, the sale of our shareholding in Aluminium Bahrain and the divestment of our Functional Forms Business are examples of our commitment to this journey," the CEO remarked..