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SABIC posts sar 5.63 billion ($1.5 billion) profit for 2019

29/01/2020

Home > News & Media > Latest News > SABIC posts sar 5.63 billion ($1.5 billion) profit for 2019

SABIC today confirmed annual profits of SAR 5.63 billion ($1.5 billion) as it announced financial results for the fourth quarter of 2019. 

The company’s revenue in Q4 reached SAR 32.81 billion ($8.75 billion) compared to SAR 33.69 billion ($8.98 billion) in the previous quarter. Meanwhile a net loss of SAR 0.72 billion ($0.19 billion) represented a decrease in net income quarter-over-quarter.

Announcing the results at a press conference in Riyadh on Jan. 29 Yousef Al-Benyan, SABIC Vice Chairman and CEO, said:
“The petrochemical industry was negatively impacted in 2019 by additional new supply in key products coming on-stream coupled with a moderation in global growth compared to 2018. However, our strong focus on cost controls and safe and reliable operations mitigated some of these negative factors in 2019. This is evident by the 5 % reduction in our SG&A in 2019 compared to 2018”

He continued, “Providing strong and competitive dividends reliably to our shareholders is important. Despite a decrease in earnings in the second half of 2019, the SABIC Board announced a dividend distribution of SAR 2.2 per share for the second half of 2019 similar to the first half of 2019. Going forward our dividend will continue to be supported by a disciplined approach to capital allocation and by sustaining a strong balance sheet”.

He added: “We are in a cyclical industry and the challenges are not new to SABIC. Our strategy is geared towards stable and long-term growth; and enables us to remain resilient to the headwinds.”

Mr Al-Benyan identified sustainability and innovation as continued critical success factors for SABIC and drivers for the continued growth of its brand value which increased by 9.3% to US$ 4.33 billion in the last year, according to the independent brand valuation consultancy, Brand Finance.

He also noted important achievements for SABIC in the last quarter including a recently announced share-purchase agreement that will see the company increase its shareholding in SAFCO to 50.1% with the latter acquiring the SABIC Agri-Nutrients Investment Company (SANIC).  The move is expected to accelerate SABIC’s Agri-Nutrients growth strategy, while increasing its efficiency and maintaining customer intimacy.

In the last year, SABIC also received approvals to merge two wholly-owned affiliates, Saudi Petrochemical Company (SADAF) with its wholly-owned affiliate Arabian Petrochemical Company (PETROKEMYA). The move is part of SABIC’s strategic transformation plan to increase the efficiency and competitiveness of its global operations.

Regulatory approvals received in 2019 also enabled SABIC to increase its stake in Ar-Razi, the world’s largest methanol complex, to 75 percent and renewed its partnerships with Japan Saudi Arabia Methanol Company (JSMC) for a further 20 years.

In the same period, SABIC and Exxon Mobil broke ground on a new joint venture project in the U.S. Gulf Coast. The Gulf Coast Growth Ventures project includes a 1.8 million ton ethylene unit, which will feed a monoethylene glycol unit and two polyethylene units, and is expected to go-live in 2022.

In the last quarter, an EcoVadis evaluation of 30,000 global companies’ sustainability and CSR performance placed SABIC among the top 1% best performers in the 'Basic Chemicals, Fertilizers, Plastics & Synthetic Rubber Companies' category. SABIC and its affiliate SAFCO also received the Industry Stewardship Champion gold medal at International Fertilizer Association (IFA) Strategic Forum in France. 

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