Saudi SABIC optimistic Q2 after big first quarter

Saudi SABIC optimistic on Q2 after big first quarter

12:05 PM, 7th June 2011
Saudi SABIC optimistic on Q2 after big first quarter

  • CEO says “hopeful” Q2 results will be better than Q1
  • Sees Q2 demand to be similar to that of Q1
  • SABIC Q1 sales 45 bln riyals - CEO

 

RIYADH, SAUDI ARABIA: Saudi Basic Industries Corp (SABIC) expects second-quarter results to be better than the previous one and the chemicals maker sees demand to be similar for the rest of the year, its Chief Executive said.

 

The world’s biggest petrochemical firm by market value posted a forecast-beating 42-per cent jump in first quarter profit on Monday. Chief Executive Mohamed al-Mady said on Tuesday that sales in the first quarter were 45 billion riyals ($ 12 billion). That compared with revenue of 34.13 billion riyals in the prior-year period.

 

“We are very optimistic that we will continue on the same demand for the rest of the year,” said Mady. When asked if second-quarter results will be better than the previous quarter, Al-Mady said, “Yes, it is possible if things continue the same way.” Earlier this year, SABIC said it expects higher sales and profitability through 2011 and 2012 as petrochemical prices return to pre-crisis levels and further output capacity is added.

 

SABIC usually does better in terms of profitability than its rivals because it pays a government subsidised 75 cents per million BTU (British Thermal Unit) for gas feedstock, a fraction of the cost on international markets.

 

The firm reiterated on Tuesday that operations at its affiliate Saudi Kayan Petrochemicals will start commercial production in the second half of the year.

(C) Reuters

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