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Sabic Q3 net profit up 47% as sales volumes rise, some impairments reversed
[DUBAI] Saudi Basic Industries Corp (Sabic), the world's 4th-biggest petrochemicals firm, reported a 47 per cent rise in third-quarter profit, beating estimates on higher sales and output, but warned it still faces price pressures for some time to come.
Sabic reported a net profit of 1.09 billion riyals (S$394 million) in the quarter that ended on Sept 30, up from 740 million riyals in the same period a year earlier. The result came after three straight quarters of losses, on a jump in impairment charges and drop in sales.
Still Sabic cautioned that supply still exceeds demand for its key products, which will continue to pressure product prices and margins for the foreseeable future.
The third-quarter return to profit, Sabic said, was mainly due to higher average selling prices, higher production and sales volume, in addition to a reversal of impairment provisions in certain financial assets in the quarter of about 690 million riyals.
Analysts had expected Sabic to post a net profit of 775 million riyals, according to a mean estimate of analysts based on Refinitiv Eikon data showed.
"The third quarter of 2020 benefitted from an improvement in economic activity and an increase in oil price, which translated in higher product prices," Sabic chief executive Yousef al-Benyan said in a statement.