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Friday, November 22, 2024
Friday November 22, 2024
Friday November 22, 2024

Sabic reports Q3 profit of $266.2 million, marking significant turnaround

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Sabic Q3 profit 2024: Major recovery as revenues and operational gains drive turnaround

SABIC, a major petrochemical company, reported a net profit of SR1 billion ($266.27 million) for Q3 2024, marking a strong recovery from last year’s SR2.87 billion loss. This SABIC Q3 profit 2024 turnaround highlights the impact of strategic efforts and operational improvements over the past year.

The positive financial results were attributed to a variety of factors, including an increase in operational income amounting to SR797 million. This boost was facilitated by an improved gross profit margin, although it was partially offset by rising operating costs. SABIC’s revenue also rose by 3 per cent year-on-year to reach SR36.88 billion, driven primarily by higher average selling prices, despite a slight decline in sales volume.

In addition to increased operational income, SABIC benefitted from gains linked to the divestment of its Functional Forms business and advantageous currency exchange rates. However, the reported profit fell short of analyst expectations, which had forecasted a profit of SR1.6 billion, according to Reuters.

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A notable aspect of SABIC’s performance was its reduced losses from discontinued operations, amounting to SR3.3 billion. This reduction primarily resulted from a fair value reassessment of its Saudi Iron and Steel Co. (Hadeed). The classification of Hadeed as a discontinued operation will persist until the finalisation of its sale, previously announced by SABIC.

When comparing Q3 2024 to the previous quarter, the net profit saw a decline from SR2.18 billion, largely due to a lower gross profit of SR194 million, attributed to softer selling prices and increased feedstock costs. Additionally, operating expenses rose by SR223 million, while profits from associates and joint ventures decreased by SR313 million, following a fair value assessment related to SABIC’s impending sale of its shares in Aluminium Bahrain (Alba).

Despite these challenges, SABIC’s total revenue for the first nine months of 2024 reached SR105.28 billion, with a net profit of SR3.43 billion—a significant improvement from the SR1.04 billion loss recorded during the same timeframe last year. This financial turnaround was further supported by diminished losses from discontinued operations and lower Zakat expenses, which were reduced by SR1.05 billion due to adjustments in regulatory provisions made in June.

In a notable strategic move, the Saudi Mining Company completed its acquisition of SABIC’s 20.62 per cent stake in Aluminium Bahrain (Alba), a transaction valued between SR3.62 billion ($960 million) and SR3.97 billion. This acquisition represents a key milestone in SABIC’s strategy for regional growth and development.

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