Sabic reported a decline of revenue by 29% YoY and sales reached SR24.62 billion ($6.57 billion) in the second quarter of the current fiscal year.

 

Loss from operations for the quarter totalled SR1.26 billion ($0.34 billion). This was higher than the loss from operations of SR0.06 billion [$0.02 billion] in the previous quarter and lower than the profit from operations of SR4.02 billion [$1.07 billion] in the second quarter of 2019. 

 

Net losses during the second quarter amounted to SR2.22 billion ($0.59 billion). This was higher than the net loss of SR1.05 billion [$0.28 billion] in the previous quarter and lower than the net profit of SR2.03 billion ($0.54 billion) in the second quarter of 2019.

 

SABIC blamed 1.18 billion riyals in impairments on capital assets and lower average selling prices and sales volumes for the second-quarter loss, which compared to a net profit of 2.03 billion riyals a year earlier.

 

Yousef Al-Benyan, Sabic Vice Chairman and CEO, said that Sabic’s performance came in the context of ongoing significant challenges facing both the chemicals sector and the financial markets globally.

 

“The second quarter saw strong headwinds as global growth declined significantly. This was due to COVID-19 impacting the supply and demand balance for our critical products and the resultant effect on prices and margins,” he said.

 

“Despite the challenging environment, Sabic has shown resilience in its operations. We remain committed to protecting the health and safety of our employees, supplying our customers reliably, supporting humanitarian efforts and proactively collaborating with customers, logistic partners, governments and health authorities to maximize our collective positive impact on communities.”

 

“In the current tough macro environment, maintaining a strong balance sheet and a strong credit rating on a standalone basis, and delivering competitive dividends to our shareholders are high priorities,” Al-Benyan added.

 

Saudi oil producer Aramco completed its purchase of a 70% stake in SABIC for $69.1 billion in June and extended the payment period by three years to 2028, providing a cushion against weak oil prices.

 

Al-Benyan said: “Our collaboration with Saudi Aramco will accelerate the achievement of Sabic’s strategic objectives. There will be benefits for business and operations, with coordinated efforts for sales and marketing bringing one face to the market. We will work together with Saudi Aramco to realize the many potential synergies including capitalizing on expertise in executing and streamlining growth projects coupled with distribution, logistics and supply chain activities. Bringing the businesses together will also support the Kingdom’s strategy of maximizing the value generated by the petrochemicals industry and delivering Saudi Vision 2030.