Saudi Basic Industries Corporation (SABIC) ended a difficult year with a net profit of SR2.2 billion, despite the losses incurred during the first three quarters, which were reflected in the global demand for energy products.
In the first quarter of 2020, the company recorded a loss of SR1.04 billion, which further increased during the second quarter to SR2.2 billion, while the situation improved during the third quarter, recording a net profit of SR1.08 billion.
SABIC’s financial results for Q4 of 2020 showed a 104 percent quarter-on-quarter increase in net profit, with revenues amounting to SR32.85 billion and a net profit of SR2.22 billion.
The company’s 2020 annual profits totaled SR40 million and annual revenues amounted to SR116.96 billion, compared with SR135.40 billion in 2019.
Speaking at a press conference, SABIC CEO Yousef al-Benyan said that despite the challenges posed by COVID-19, the company demonstrated the success of its business model and ability to enhance resilience, boost operational excellence, and strengthen the global supply chain and presence.
“Complementing this, we witnessed the benefits of our transformation journey. The long-term trends we identified at the start were accelerated in the new normal, but our decisive pre-emptive actions played a key role in supporting our growth, cost control, and competitiveness.”
The CEO also noted that Q4 benefited from the sustained economic recovery, which translated into higher demand for the company’s products, indicating that “our global business model and the strength of our global supply chain continue to demonstrate their resilience and flexibility, positioning us well for long-term growth.”
SABIC also provided an update on the progress being made with Saudi Aramco in the identification of areas of synergy and collaboration that will create value for both parties.
In June, Aramco acquired a 70 percent stake in SABIC, as both companies are focused on strategically transforming their growth optimization, joint venture management, and service delivery model.
SABIC’s share of the expected annual value creation with Aramco is predicted to amount to between $1.5 billion to $1.8 billion by 2025.
SABIC announced the closure of the share purchase agreement with SAFCO, resulting in a new entity, named SABIC Agri-Nutrients Company.
It will provide more focus and agility for the agri-nutrients business and a platform of sustainable growth to be both the national champion and a global leader in the industry.
SABIC established its specialties business as a standalone as well during the fourth quarter, which will generate significant value by allowing it to unlock growth potential and become even more effective in addressing its unique business and customer requirements.