Riyadh, Dubai – Petrochemicals company Sabic reported a 6.8% drop in profit in Q3 2016 due to lower selling prices for its products and slower growth in major markets including China.
Net income was SAR 5.22bn ($1.39 billion) compared to SAR 5.6bn a year earlier, the Riyadh-based company said in a statement to the Saudi stock market.
At a news conference in Riyadh ceo Yousef Al Benyan described the results as “very good, given global market conditions, and European factories became more profitable”
The company’s difficulties included higher utility costs and an economic slowdown in China, and its average selling prices fell 11%, he said. Sales slid by 11% to 33.31 billion riyals.
“We predict that 2017 is going to be a quite challenging year for us,” Al Benyan said. “We need to focus internally on how we can improve our efficiency.” Sabic is combining its polymers and chemicals units to save money on feedstock and is restructuring its metals business and folding it into a steel company, he added.
Despite the challenges, Sabic will continue in its growth policy,” Al Benyan said. “We will expand our marketing operations and sales in China to reach the strategic share we want.”
The US and Africa are also promising markets, he said. Sabic’s production this year has gained 3% on the same period of 2015, al Benyan said.
“The company is looking for possible acquisitions in the US or China, though its efforts are at “a very early stage.” he said.