Saudi Petrochemicals giant posts 81% profit gain

By BLOOMBERG

RIYADH • Saudi Basic Industries Corp, the Middle East’s biggest petrochemicals producer, posted an 81% increase in second-quarter (2Q) profit on higher sales prices and volumes.

Net income rose to 6.7 billion riyals (RM7.38 billion) from 3.71 billion riyals a year ago, the company known as Sabic said in a statement.

Revenue climbed 26% to 43.3 billion riyals. The company said it put into effect a “strategic restructuring initiative” that cut total costs by 1.1 billion riyals.

State-owned Saudi Aramco said earlier this month it may buy shares in Sabic from the country’s sovereign wealth fund as the world’s biggest crude oil exporter expands ahead of a planned initial public offering. Aramco has no plans to acquire any publicly held shares in Sabic, it said.

Sabic CEO Yousef Abdullah Al Benyan declined to comment on the size or timing of a possible stake purchase by Aramco, when asked about it yesterday at a news conference in Riyadh.

He also declined to comment on Aramco’s possible decision to tap the international bond market for the first time to finance the acquisition of a stake in his company.

Sabic expects to secure antitrust approval by the end of the 3Q to buy a stake in Switzerland- based chemicals company Clariant AG, Al Benyan said. Sabic agreed in January to acquire a 24.99% of Clariant from White Tale Holdings.

Sabic shares have gained 27% this year, helped by MSCI Inc’s announcement last month that it will include Saudi Arabia in its emerging- market index next year.