Saudi Basic Industries (SASE:2010) rebounded to profitability in the third quarter, boosted by a 3% year-over-year increase in revenue, attributed to a stronger sales volume, as outlined in a Monday release. For the three months ending on September 30, the petrochemicals manufacturer reported a net profit of 1 billion Saudi riyals, recovering from last year's loss of 2.88 billion riyals due to enhanced income from operations and a reduced net loss from discontinued operations. Nevertheless, profit decreased from the previous quarter's 2.18 billion riyals.
"Overcapacity continues to weigh on the market," stated Chief Executive Abdulrahman Al-Fageeh, emphasizing that "current utilization rates remain below long-term averages." In terms of revenue, the company experienced an annual uptick to 36.88 billion riyals from 35.98 billion riyals, as improved average selling prices compensated for the decline in sales volume.
The petrochemicals segment demonstrated a 2% revenue growth, reaching 34.08 billion riyals, primarily driven by increased sales of polyethylene and polypropylene. Concurrently, the agri-nutrients sector noted a 17% revenue surge to 2.80 billion riyals, propelled by elevated prices. Looking forward, Sabic anticipates capital expenditures ranging from $3.3 billion to $3.9 billion in 2024, with a long-term aim of strategic portfolio optimization and the restructuring of underperforming assets among other initiatives.
"We will continue to optimize our portfolio to maximize our shareholder returns, focusing on enhancing returns of our core business and reallocating capital to higher-margin opportunities. The divestment of Hadeed, the sale of our shareholding in Aluminium Bahrain (Alba), and the divestment of our Functional Forms Business are examples of our commitment to this journey," the CEO elaborated. In midday trading, Sabic showed a slight loss.
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