Saudi Basic Industries Corp. (SABIC), the Middle East's largest listed company, said Saturday its net profit surged to SR5.43 billion ($1.5 billion), overturning a loss last year on higher sales, production volumes and prices. The firm said first-quarter operating profit soared to SR9.71 billion from SR380 million in the corresponding period a year earlier, while gross income for the period jumped to SR12.2 billion from SR3.6 billion. SABIC shares finished trading unchanged Saturday at SR103.25. Improved prices and new production helped Sabic recover from its loss a year earlier, caused by a slump in the automotive, construction and consumer industries. Yanbu National Petroleum Co., a SABIC unit, started commercial operations in Saudi Arabia, the Arab world's biggest economy, in the first quarter. Prices for olefins and chemical intermediates have advanced on greater demand. “There have been better overall volumes and pricing for petrochemicals, fertilizers and steel in the first quarter,” Laurent-Patrick Gally, senior vice president of research at Shuaa Capital PCS, in Dubai, said in an interview April 14. Ammonia and urea prices rose 19 percent and 9 percent, respectively, in the first quarter from the fourth quarter, he said. The results came in above analysts expectations. Kuwait-based Global Investment House had expected Sabic to post a first-quarter net profit of SR4.75 billion while analysts at the Riyadh-based KSB Capital Group had penciled in SR5.07 billion. First-quarter earnings per share came in at SR1.81 versus a loss of SR0.32 in the first quarter of last year, the company said in a statement posted on the Saudi bourse website. SABIC reported a surprising loss of SR974 million in the first quarter last year - its first quarterly loss since 2001. It reported a net profit of SR1.81 billion, SR3.6 billion, and SR4.58 billion in the second, third and fourth quarters respectively. BASF, Dow Chemical Co. and other chemical makers have started to see higher demand in Asian and emerging economies after shutting plants and revamping units last year because of the global credit crisis. SABIC Chairman Prince Saud Bin Thunayan Al-Saud expects sales to increase this year as demand rises in China and in the Kingdom. SABIC Innovative Plastics, the US unit purchased from General Electric Co. for $11.6 billion in 2007, may also be showing signs of recovery. The purchase, the largest by a Gulf-based company, added a network of factories making resins and thermoplastic sheets used in cars, roofs and lighting before the biggest US carmakers hit an earnings slump that pushed them close to bankruptcy. SABIC also benefitted from improved earnings at its other local units. Saudi Arabian Fertilizer Co. said on April 10 that first-quarter profit rose 33 percent to SR698 million. Yanbu National Petrochemical Co. reported on April 14 a first- quarter profit of SR259.4 million.
