SABIC incurred a net loss of 2.2 billion riyals ($ 586.6 million) in the second quarter due to impairment provisions and declining sales, which is significantly more than the average loss of 40.85 million riyals that four analysts had forecast in a Refinitiv Eikon poll.
Sabic CEO Youssef Al-Bunyan said on Thursday that the biggest impact of the Corona virus on the company came in the second quarter, and that SABIC’s activities began to see a slight improvement in July and August.
“We hope this will be a positive thing, but the rest of the challenges remain,” he said in a press briefing to announce the business results.
He added, “The future of demand is driven by uncertainty in the energy sector. Market conditions will put pressure on the chemical industry for the rest of this year. ”
SABIC attributed the loss in the second quarter to recording impairment provisions of 1.18 billion riyals in capital assets and a decline in average sales prices and quantities.
The loss comes compared to a net profit of 2.03 billion riyals a year ago.
Bunyan said that the average prices of petrochemicals fell 27 percent year on year in the second quarter and 18 percent, compared to levels recorded in the first quarter. SABIC maintained production levels as they were during that period.
Saudi oil producer Saudi Aramco completed the purchase of a 70 percent stake in SABIC for $ 69.1 billion in June, and extended the payment period by three years to 2028, to hedge against weak oil prices.
Moataz Mohamed prepared for the Arab publication