The Saudi Basic Industries Corporation (SABIC) revealed a slight improvement in sales of the third quarter of this year, while it acknowledged a significant decline in the average prices of products during the second quarter of 2020.
In a statement on Thursday, SABIC - the fourth largest petrochemical company in the world – announced that it suffered its third consecutive quarterly loss, but expected a slight improvement during the current second half, despite the scenario of lower oil prices and weak current global demand.
In a virtual news conference on Thursday, Chief Executive Yousef al-Benyan said that the prices of products in the second quarter compared to the first quarter of the year witnessed a decrease of 18 percent, while the decline on an annual basis represented 27 percent.
Al-Benyan pointed out that the second quarter was the most affected by the coronavirus pandemic due to the economic closure, but that the company’s production and sales declined by only one percent.
“The future of demand is driven by uncertainties in the energy market. Market conditions are going to put pressure on the chemical industry for the remainder of this year,” he said.
Asked about the negative impact of Covid-19 in its second stage, Al-Benyan expressed optimism that there would be no return to a complete global economic shutdown because its impact was clear and significant in the second quarter of 2020.
“We expect that there won’t be a complete closure of the global economy… It is imperative to stay alive, stick to precautions and manage the crisis well,” he underlined.
SABIC blamed 1.18 billion riyals in impairments on capital assets and lower average selling prices and sales volumes for the second-quarter loss, which compared to a net profit of 2.03 billion riyals a year earlier.
Al-Benyan said average petrochemical prices had fallen 27% year-on-year in the second quarter and 18% from first-quarter levels. SABIC had maintained production levels in the period.