Saudi SABIC Expected to Achieve $1.2 Billion in Profits in 2024

SABIC Manufacturing Site in Jubail, Saudi Arabia (Company's Website)
SABIC Manufacturing Site in Jubail, Saudi Arabia (Company's Website)
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Saudi SABIC Expected to Achieve $1.2 Billion in Profits in 2024

SABIC Manufacturing Site in Jubail, Saudi Arabia (Company's Website)
SABIC Manufacturing Site in Jubail, Saudi Arabia (Company's Website)

Economic analysts expect Saudi Basic Industries Corporation (SABIC) to achieve a net profit of approximately $258 million in the fourth quarter of 2024, bringing its total annual earnings to around $1.2 billion. However, the petrochemical sector continues to face challenges, including declining global demand, rising operational costs, and shrinking profit margins.

SABIC, one of the world’s largest petrochemical companies, returned to profitability in the third quarter of 2024, reporting $266 million in profits compared to a $765 million loss in the same period of 2023. The company is set to announce its financial results for the fourth quarter and full year 2024 in a press conference on Wednesday.

According to Dr. Suleiman Al-Humaid Al-Khalidi, a financial analyst and member of the Saudi Economic Association, SABIC’s expected fourth-quarter profit of $258 million (SAR969 million) marks a significant recovery from its $500 million (SAR1.7 billion) loss in the same quarter of 2023.

He noted that the company performed better in 2024, recording a nine-month profit of $915 million (SAR3.43 billion) compared to a $373 million (SAR1.40 billion) loss in the same period of 2023.

Despite its stock price declining from a high of SAR139 in 2022 to SAR65 on Monday, SABIC has continued to distribute dividends. This resilience is attributed to increased operational income, reduced losses from discontinued operations, and lower zakat expenses.

Al-Khalidi highlighted key factors influencing SABIC’s financial performance, including fluctuations in petrochemical prices, global market volatility, and rising raw material and operational costs, all of which impact profit margins.

He stressed the importance of expanding into emerging markets, increasing global market share, investing in green technologies, diversifying its product portfolio, and forming strategic partnerships to enhance competitiveness.

Mohammed Hamdi Omar, CEO of G-World Research, emphasized that commodity price fluctuations and varying demand for petrochemical products will affect SABIC’s fourth-quarter results.

He noted that market conditions, particularly oil prices and supply chain dynamics, will play a crucial role in shaping the company’s financial performance. Despite rising operational costs, SABIC is expected to maintain or improve profit margins, with its core business units—basic chemicals, intermediates, and polymers—playing a key role.

SABIC’s third-quarter 2024 profit of $267 million (SAR 1 billion) was driven by higher gross profit margins, despite increased operational costs. Gains from selling its functional forms business, foreign exchange differences, and reduced losses from discontinued operations, particularly the revaluation of Saudi Iron and Steel Company (Hadeed), also contributed. However, finance income declined due to the revaluation of equity derivatives.

Despite market challenges, analysts believe SABIC’s focus on efficiency, cost management, and strategic expansion will help it navigate the volatile petrochemical sector in 2024.



Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)
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Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)

The Saudi real estate market is currently in a state of cautious anticipation, driven by unprecedented decisions and measures announced by Crown Prince Mohammed bin Salman.

These steps aim to increase the supply of properties and restore balance in the market to address the rising costs of land and rental prices.

Data from the market shows a stagnation in property purchases by citizens, as they await the impact of these measures, hoping they will bring stability to property prices in Riyadh and lower costs.

In March, the Crown Prince directed the implementation of a series of regulatory measures, including lifting restrictions on the development of over 81 square kilometers of land north of Riyadh.

This move is expected to deliver tens of thousands of affordable residential plots annually to citizens, following a significant rise in property prices in Riyadh.

According to Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail, these measures will add between 10,000 and 40,000 plots of land annually in the northern region of Riyadh, ensuring a better balance between supply and demand in the market.

The Crown Prince has already donated 1 billion riyals to the National Developmental Housing Foundation (Sakan), represented by Jood Eskan, to support home ownership for eligible families across Saudi Arabia.

The housing projects funded by this donation are to be completed within 12 months and executed by national companies.

The Crown Prince also ordered monthly progress reports to ensure that all residential units are delivered within one year.

Real estate market experts told Asharq Al-Awsat that current market data reveals a stagnation in property purchases by citizens, as they await the impact of recent policy changes and their potential to restore balance to the market.

Many real estate companies and agencies have observed a decline in sales activity, with property marketers facing difficulties in encouraging buyers who prefer to delay decisions until the effects of Crown Prince Mohammed bin Salman’s directives take shape.

Real estate expert and marketer Abdullah Al-Mousa told Asharq Al-Awsat that the current stagnation in property prices in Riyadh is a direct result of the Crown Prince’s initiatives to increase property supply, which aim to restore price equilibrium following the recent surge in real estate costs.

He views the decline as a positive step toward balancing supply and demand, contributing to a more sustainable and fair market for all stakeholders.

Al-Mousa anticipates that this stagnation will persist until all government directives are fully implemented in the coming months.

He noted that, with plans to increase the property supply, the market could experience gradual recovery in the long term, especially given Riyadh’s continued population and economic growth.

The expert highlighted that several factors may sustain the current stagnation, including high interest rates, which reduce citizens’ purchasing power, the oversupply of properties relative to demand, and global economic fluctuations that could affect investments.

However, he emphasized that Riyadh’s ongoing population growth, improving national economy, rising per capita income, large-scale infrastructure projects like the Riyadh Metro, and continued government support for housing programs are expected to drive the recovery of the real estate market.

Al-Mousa also predicted further improvement in the sector as policies are implemented and market conditions are monitored.