RIYADH: Petrochemical giant Saudi Basic Industries Corp (SABIC) said sales growth slowed in the second quarter as prices for its products fell.
SABIC, the world’s biggest chemicals maker by market value, said its inventories surged by around a third due to a slowdown in demand.
The annual rise in net profit came from new output that came on stream but it was below analysts’ forecasts for the period as weaker prices ate into margins.
Second-quarter sales stood at 38.86 billion riyals ($10.36 billion), up 64 percent from year-on-year, but down from 72 percent during the previous quarter.
Profits from petrochemicals inched down to 6.16 billion riyals in the second-quarter from 6.20 billion riyals in the first-quarter. Steel profit fell to 0.28 billion riyals in the second-quarter down from 0.53 billion riyals a quarter earlier.
Chief Financial Officer Mutlaq Al-Morished has said inventories would pose less of a problem during the second half. SABIC raised its output during the second quarter with the start of commercial operations at its Yansab, Sharq affiliates and at a China-based joint-venture.
Analysts say global demand eased during the second quarter compared to the first with the entry of new production capacity.
