Saudi Basic Industries Corp., a global leader in the chemicals industry, has reported a surprise net loss for the second consecutive quarter. The company's statement released on Sunday revealed a net loss of 1.2 billion riyals ($320 million), a stark contrast to analysts' projections of a 699 million riyals profit. Sabic also fell short of revenue and earnings per share expectations for the quarter.
Abdulrahman Al-Fageeh, Sabic's Chief Executive Officer, attributed the unexpected quarterly deficit primarily to expenses incurred as part of the company's ongoing business restructuring initiative aimed at streamlining operations and reducing costs. Al-Fageeh expressed confidence that these restructuring efforts would yield positive long-term outcomes by enhancing the company's cost control mechanisms.
In addition to the restructuring costs, Al-Fageeh cited a confluence of challenging global economic factors impacting Sabic's performance. These included a general economic slowdown, persistent market uncertainty, and a significant oversupply within the petrochemical sector, all of which have exerted downward pressure on demand and profit margins.
"The oversupply of petrochemicals continues to pressurize product prices and, in turn, profit margins," Al-Fageeh explained during a press conference held at Sabic's headquarters in Riyadh on May 4th.
Despite the difficult market environment and the reported financial loss, Al-Fageeh highlighted a positive development in Sabic's commitment to Environment, Health, Safety, and Security (EHSS). He noted a significant 17% year-on-year improvement in the company's Safety, Health, and Environment Rate (SHER), underscoring Sabic's ongoing focus on operational excellence and responsible practices.
Al-Fageeh reassured stakeholders of Sabic's robust financial standing and the company's proactive measures to optimize costs, enhance efficiency across its operations, and maintain its competitive edge in the global market. He also affirmed that Sabic's strategic growth projects remain on schedule and are progressing according to the planned timelines.
Furthermore, Sabic's CEO proudly spotlighted the company's achievements in global innovation, including the recent receipt of six prestigious Edison Awards this year. This marks the fifth consecutive year that Sabic has been recognized with these awards for its cutting-edge industrial solutions, demonstrating its continued commitment to research and development and its ability to deliver innovative products to the market. While the current financial results reflect the challenges of restructuring and a demanding global landscape, Sabic's leadership emphasizes the long-term strategic vision and ongoing efforts to position the company for future growth and success.