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Saudi Oil Companies Incur Losses in 2023 Due to Slow Global Demand, Falling Product Prices

SABIC recorded the highest loss among companies in the sector. (SABIC website)
SABIC recorded the highest loss among companies in the sector. (SABIC website)
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Saudi Oil Companies Incur Losses in 2023 Due to Slow Global Demand, Falling Product Prices

SABIC recorded the highest loss among companies in the sector. (SABIC website)
SABIC recorded the highest loss among companies in the sector. (SABIC website)

Analysts said that the large losses recorded by oil companies listed on the Saudi Stock Exchange (Tadawul) were due to the slowdown in the global economy, which caused a decline in demand for petrochemical products.
Petrochemical companies listed on Tadawul registered a combined net loss of around SAR 5.2 billion ($1.4 billion) in 2023, compared to profits that amounted to SAR 29.8 billion in 2022.
Among the 12 oil companies listed on Tadawul, five companies achieved a net profit, namely: SABIC Agri-Nutrients, Tasnee, Saudi Group, Sipchem, and Advanced, albeit with a decline compared to the previous year.
SABIC recorded the highest loss among the companies in the sector, amounting to SAR 2.77 billion, compared to profits of SAR 16.53 billion during the previous year. The company attributed these figures to non-cash losses as a result of the Public Investment Fund’s acquisition of SABIC’s entire stake in the Saudi Iron and Steel Company (Hadeed).
Saudi Kayan came in second place in terms of the highest losses, which amounted to SAR 2.14 billion in 2023, compared to SAR 1.24 billion in 2022.
The company explained that its losses were mainly due to the decrease in the average selling prices of the products, as well as in the quantities produced and sold, pointing to the shutdown of some production units to perform scheduled periodic maintenance.
On the other hand, SABIC Agri-Nutrients topped the list of companies that achieved the highest profits, despite a decline of about 64 percent compared to the previous year. The company registered net profits amounting to SAR 3.66 billion in 2023, compared to SAR 10.04 billion in 2022.
In remarks to Asharq Al-Awsat, financial markets analyst Abdullah Al-Kathiri linked the oil companies’ losses to global conditions, mainly the economic slowdown worldwide, especially in China, which caused a decline in demand for petrochemical products.
For his part, financial advisor at Arab Trader Mohammed Al-Maymouni noted that despite the sharp decline in the profitability of companies, this will provide an investment opportunity in the next two quarters in conjunction with the improvement in oil prices and their upward trend above $80.

 

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Business

GCC, India Launch Free Trade Agreement Negotiations  

Officials pose for a photo following the signing of the agreement between the Gulf Cooperation Council and India. (Asharq Al-Awsat)
Officials pose for a photo following the signing of the agreement between the Gulf Cooperation Council and India. (Asharq Al-Awsat)
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GCC, India Launch Free Trade Agreement Negotiations  

Officials pose for a photo following the signing of the agreement between the Gulf Cooperation Council and India. (Asharq Al-Awsat)
Officials pose for a photo following the signing of the agreement between the Gulf Cooperation Council and India. (Asharq Al-Awsat)

The Gulf Cooperation Council (GCC) and India have formally launched negotiations for a free trade agreement (FTA), in a move officials described as a new chapter in their strategic partnership.

GCC Secretary-General Jasem Albudaiwi and India’s Minister of Commerce and Industry Piyush Goyal signed the joint statement initiating the talks during a meeting in New Delhi on Tuesday.

Albudaiwi said the launch of negotiations reflects the depth of ties between the Gulf states and India, stressing that the relationship extends beyond transient economic interests.

It is a longstanding partnership strengthened by centuries of cultural and social exchange and guided by a shared commitment to broad-based cooperation that serves mutual interests, he added.

India is one of the GCC’s most significant trading partners, Albudaiwi noted, pointing to steadily expanding trade volumes and growing integration in key sectors such as energy, food security and technology.

Deepening cooperation has become a strategic economic imperative, he remarked.

GCC Secretary-General Jasem Albudaiwi and India’s Minister of Commerce and Industry Piyush Goyal sign the agreement. (Asharq Al-Awsat)

“New Delhi is not only a vast and promising market, but also a global hub for innovation and industry,” he stated.

The terms of reference signed in February establish a comprehensive framework for the negotiations. The two sides agreed to explore cooperation across a wide range of areas, including trade in goods and services, customs procedures and digital trade.

The framework also addresses sanitary and phytosanitary standards, intellectual property rights, and support for micro, small and medium-sized enterprises, among other issues of mutual interest. Albudaiwi said the scope of the talks reflects an ambition to craft an agreement aligned with the evolving global economy.

He hoped that the negotiations would culminate in a comprehensive and forward-looking FTA that eliminates tariff and non-tariff barriers, facilitates investment flows in both directions and strengthens trade and investment liberalization between India and the GCC.

Such an agreement would create a more competitive business environment, expand private-sector opportunities, reinforce supply chains and accelerate economic growth in line with the Gulf states’ development strategies, he said.

The GCC General Secretariat is ready to host the first round of negotiations at its headquarters in Riyadh in the second half of this year, he added.

Business

Saudi Telecom Sector Solidifies Leadership with $28 Billion in Revenue in 2025

The Saudi Telecom Company (stc) pavilion at the LEAP International Conference in Riyadh (Asharq Al-Awsat)
The Saudi Telecom Company (stc) pavilion at the LEAP International Conference in Riyadh (Asharq Al-Awsat)
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Saudi Telecom Sector Solidifies Leadership with $28 Billion in Revenue in 2025

The Saudi Telecom Company (stc) pavilion at the LEAP International Conference in Riyadh (Asharq Al-Awsat)
The Saudi Telecom Company (stc) pavilion at the LEAP International Conference in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s telecommunications sector has reaffirmed the strength of its operating model and growth potential, reporting a solid rise in combined revenues in 2025.

The performance reflects continued customer growth and an expanding portfolio of digital solutions, underscoring the sector’s central role in advancing Vision 2030.

Companies listed on the Saudi Exchange (Tadawul) posted a 3.8 percent increase in total revenue, exceeding SAR108.4 billion ($28.9 billion) in 2025, compared with SAR104.46 billion ($24.9 billion) in 2024.

However, despite strong top-line growth, aggregate net profits for the sector fell by 33.4 percent. The three largest operators — Saudi Telecom Company (stc), Etihad Etisalat Company (Mobily), and Mobile Telecommunications Company Saudi Arabia (Zain KSA) — reported combined earnings of SAR18.9 billion ($5 billion), down from SAR28.39 billion ($7.6 billion) the previous year.

The sector comprises four listed firms. Three — stc, Mobily and Zain KSA — follow a December fiscal year-end, while Etihad Atheeb Telecommunication Company (GO Telecom) closes its fiscal year at the end of March.

The decline in profitability was largely driven by stc, which accounts for 78 percent of the sector’s earnings. Its net profit fell 39.9 percent to SAR14.83 billion. Analysts attributed the drop mainly to a high comparison base in 2024, when exceptional and non-recurring items boosted profits to unusually elevated levels.

By contrast, Mobily reported an 11.55 percent increase in profit to SAR3.47 billion in 2025, up from SAR3.1 billion in 2024, supported by revenue growth across all business segments and an expanding customer base.

Zain KSA recorded a 1.3 percent rise in profit to SAR604 million, compared with SAR596 million the previous year. The improvement was driven by higher revenues from consumer and wholesale segments, the expansion of 5G services, and growth in Tamam Finance’s operations.

Rising Costs and Investment Pressures

Dr. Sulaiman Al-Humaid Al-Khaldi, a financial market analyst and member of the Saudi Economic Association, said the sector’s results highlight a clear divergence between revenue growth and declining profits, pointing to mounting operational and financial pressures.

Revenue growth has not translated into higher profits, as costs have increased at a faster pace than income.

Al-Khalidi expects short-term pressure on margins to persist due to continued high capital expenditure and strong price competition. Over the medium term, however, he anticipates gradual improvement supported by growing demand for data services, digital solutions and cloud computing, as well as expansion into non-traditional areas such as fintech and data centers.

He noted that the sector is undergoing a strategic shift from traditional telecom services toward integrated digital offerings, which could strengthen profitability in the future.

Profit Normalization After an Exceptional Year

Mohamed Hamdy Omar, chief executive of G World, described 2025 as a year of profit normalization following an exceptional 2024, when non-recurring gains significantly lifted stc’s net income.

He added that fourth-quarter earnings were weighed down by a strong comparison base and higher seasonal, marketing and financing costs tied to capital investments in networks and infrastructure.

At the same time, improved operational performance at Mobily and Zain KSA helped partially offset stc’s earnings decline. Omar stressed that the pressure on profits reflects accounting and financing factors rather than weakening demand or structural challenges in the sector.

Looking ahead, he expects the medium-term outlook to remain positive, driven by sustained demand for data, continued digital expansion and growth in telecom-linked financial and technology services. Profitability is projected to stabilize further in 2026 as operational efficiency improves.

Business

IMF: Kuwait Real GDP Will Expand by 3.8% in 2026

A view of Kuwait City (AFP)
A view of Kuwait City (AFP)
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IMF: Kuwait Real GDP Will Expand by 3.8% in 2026

A view of Kuwait City (AFP)
A view of Kuwait City (AFP)

The International Monetary Fund has said that economic activity in Kuwait is “rebounding,” adding that real GDP will expand by 3.8 percent in 2026.

In concluding the 2025 Article IV consultation with Kuwait, IMF Executive Directors endorsed staff’s appraisal, as follows: “An economic recovery is underway, in spite of lower oil prices. Growth is rebounding, driven by the unwinding of OPEC+ production cuts and robust non-oil growth. Inflation continues to moderate, reflecting lower core and food inflation.”

“Real GDP will expand by 3.8 percent in 2026, driven by the unwinding of OPEC+ production cuts and robust non-oil growth, estimated at 3.0 percent of GDP,” the IMF said in a statement.

“Headline CPI inflation will moderate to 2.1 percent in 2026 and then stabilize just below 2.0 percent over the medium term,” it added.

“Staff welcomes the authorities’ Vision 2035 aspirations to implement economic reforms in pursuit of a more diversified economy. To sustainably boost non-oil growth, a comprehensive and well-sequenced package of fiscal and structural reforms is needed,” said the statement.

It said that to reform energy subsidies, retail fuel, electricity and water prices should be gradually raised towards their GCC-average levels while providing targeted cash transfers to vulnerable groups.

To improve infrastructure, on-budget public investment should be further scaled up, by around 2 percent of GDP over the medium term, the statement added.