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Oil slump slashes Saudi Basic Industries Q4 profit
[DUBAI] Saudi Basic Industries Corp (SABIC), one of the world's largest petrochemicals groups, reported a 29 per cent plunge in fourth-quarter net income on Sunday, widely missing analysts' forecasts because of the tumble of global oil prices.
The Gulf's largest listed company earned US$1.16 billion in the quarter to Dec 31 compared to US$1.64 billion in the year-earlier period, SABIC said in a bourse statement.
SABIC, which is 70 per cent state-owned, attributed the fall in profits to lower average prices for the products which it sold, although this was partly offset by lower feedstock prices. Global oil prices have more than halved since last June, dragging down petrochemical product prices.
The profit was well below the average forecast of seven analysts polled by Reuters, who had predicted a quarterly profit of US$1.47 billion. It was also well below the company's third-quarter net profit of US$1.65 billion.
Lower oil prices hurt SABIC's earnings in the third quarter through the prices of raw materials and final products, its chief executive said in October.
In addition to oil, the company's results are closely tied to global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.