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SABIC Profits Jump 482% in H1 2021

Saudi Arabia’s petrochemicals giant, SABIC, doubles profits, taking advantage of the improvement in global demand (Asharq Al-Awsat)
Saudi Arabia’s petrochemicals giant, SABIC, doubles profits, taking advantage of the improvement in global demand (Asharq Al-Awsat)
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SABIC Profits Jump 482% in H1 2021

Saudi Arabia’s petrochemicals giant, SABIC, doubles profits, taking advantage of the improvement in global demand (Asharq Al-Awsat)
Saudi Arabia’s petrochemicals giant, SABIC, doubles profits, taking advantage of the improvement in global demand (Asharq Al-Awsat)

Petrochemicals giant Saudi Basic Industries Corp (SABIC) revealed on Thursday that it swung to a whopping SAR 12.5 billion ($3.3 billion) quarterly profit after posting a SAR 3.2 billion ($880 million) loss due to the coronavirus pandemic during the same period last year.

Figures recorded in H1 2021 reflect a 482% hike in profits, almost fivefold last numbers.

While the coronavirus pandemic continues to affect global markets, SABIC has registered a solid financial performance over the last three months.

In the three months to the end of June, the net profit jumped 57% to a 10-year high of SR7.64 billion ($2.03 billion) as revenue rose 13% to SR42.42 billion, SABIC said in a filing to the Tadawul stock exchange.

The Middle East’s largest petrochemicals producer said that the reason for achieving profits during the current period is due to the increase in average selling prices of products and the achievement of a net gain in SABIC’s share of joint ventures and associate companies.

During H1 2020, provisions for impairment in the value of some capital and financial assets amounting to SAR 2.28 billion were recorded.

“SABIC’s financial performance in the second quarter was strong – continuing the margin improvement seen during the first quarter of 2021,” Yousef Abdullah Al-Benyan, vice chairman and CEO of SABIC, told reporters.

“This was driven by higher sales volumes and prices, supported by a rise in oil prices and a healthy supply and demand balance for most of our key products as the global economy continued its path to recovery.”

Al-Benyan pointed to the company’s ability to benefit from improving external conditions, which was enhanced by implementing a large-scale transformation program and controlling the movement of capital strongly.

In 2015, SABIC launched its transformation program to develop its operating model, increase competitiveness, promote sustainability, and foster innovation. This came at a time when Saudi Aramco completed the acquisition of 70% of SABIC shares to increase efficiency.

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China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
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China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)

China's economy is likely to have cooled in the second quarter after a solid start to the year, as trade tensions and a prolonged property downturn drag on demand, raising pressure on policymakers to roll out additional stimulus to underpin growth.

The world's No. 2 economy has so far avoided a sharp slowdown in part due to a fragile US-China trade truce and policy support, but markets are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low.

Data due Tuesday is expected to show gross domestic product (GDP) grew 5.1% year-on-year in April-June, slowing from 5.4% in the first quarter, according to a Reuters poll. The projected pace would still exceed the 4.7% forecast in a Reuters poll in April and remains broadly in line with the official full-year target of around 5%.

"While growth has been resilient year-to-date, we still expect it to soften in the second half of the year, due to the payback of front-loaded exports, ongoing negative deflationary feedback loop, and the impact of tariffs on direct exports to the US and the global trade cycle," analysts at Morgan Stanley said in a note.

"The third-quarter growth could slow to 4.5% or lower, while Q4 faces unfavorable base effect, putting the annual growth target at risk," the analysts said. They expect Beijing to introduce a 0.5-1 trillion yuan ($69.7 billion-$139.5 billion) supplementary budget from late in the third quarter.

China's exports regained some momentum in June while imports rebounded, as factories rushed out shipments to capitalize on a fragile tariff truce between Beijing and Washington ahead of a looming August deadline.

GDP data is due on Tuesday at 0200 GMT. Separate data on June activity is expected to show both industrial output and retail sales slowing.

On a quarterly basis, the economy is forecast to have expanded 0.9% in the second quarter, slowing from 1.2% in January-March, the poll showed.

China's 2025 GDP growth is forecast to cool to 4.6% - falling short of the official goal - from last year's 5.0% and ease even further to 4.2% in 2026, according to the poll.

BALANCING ACT

Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year.

Analysts polled by Reuters expect a 10-basis point cut in the seven-day reverse repo rate - the central bank's key policy rate - in the fourth quarter, along with a similar cut to the benchmark loan prime rate (LPR).

Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from US President Donald Trump's trade tariffs.

But China observers and analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years.

Expectations are growing that China could accelerate supply-side reforms to curb excess industrial capacity and find new ways to boost domestic demand.

It's a stiff challenge, analysts say, as Chinese leaders face a delicate balancing act in their quest to cut production while maintaining employment stability in the face of a worsening labor market outlook.