Sabic reports large declines in profits revenues

Sabic reports large declines in profits and revenues

11:24 AM, 26th October 2015
Sabic reports large declines in profits and revenues

DUBAI, UAE: Saudi Arabia Fertilizers Co (SAFCO) blamed lower product prices and reduced sales quantities as it reported a 38 percent drop in third-quarter net profit that was broadly in line with analysts' forecasts.

SAFCO, a unit of Saudi Basic Industries Corp (SABIC), made a net profit of 566 million riyals ($151 million) in the three months to Sept. 30, down from 913 million riyals in the year-earlier period, it said in a bourse statement.

Five analysts had forecast the firm would make a quarterly net profit of 579 million riyals.

SAFCO, a big producer of ammonia and urea, is dependent on global demand and prices. Since mid-2013, manufacturers worldwide have voiced increasing concerns over the continued fall of urea prices due to China's increased output.

SAFCO blamed its latest profit drop on lower product prices, plus lower sales quantities because of maintenance work at one of its plants, SAFCO 4.

In July, SAFCO began commercial operations at its SAFCO 5 urea plant, which it said helped reduce the impact of the maintenance work on profits. SAFCO 5 was originally scheduled to start up in the third quarter of 2014; it has an annual production capacity of 1.1 million tonne of urea.

© Reuters News

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