Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemicals maker, rose the most in three months after saying it’s seeking to expand into China and the U.S. following a decline in first-quarter profit.
The shares advanced 1.5 percent in Riyadh today, the most since Jan. 22, even after a stock exchange filing showed earnings in the three-month period slipped 1.8 percent, missing analyst estimates.
“China is a big market for us -- we are positive that most of the biggest producers in America will start to look into China because the American market is limited and China is more dependable in terms of growth,” Chief Executive Officer Mohammed Al-Mady said today at a news conference in Riyadh. “The United States is a new market for us. If we build our first shale gas opportunity, the U.S. will be the first market we sell into.”
Sabic, the Riyadh-based company controlled by the Saudi government, has suffered as demand for petrochemicals in Europe sputters and the region’s economy struggles to recover from the global credit crisis.
Profit in the quarter slid to 6.44 billion riyals ($1.72 billion) from 6.56 billion riyals a year earlier on lower sales prices and higher costs, according to the filing. The mean estimate of nine analysts was for a profit of 6.83 billion riyals for the three months ended March, according to data compiled by Bloomberg.
“It is more difficult for us to grow and expand within the kingdom due to a shortage of gas, which is why we are looking into growing abroad more,” Al-Mady said.
The shares have now gained 3.4 percent this year. Sabic has the biggest market value on the benchmark Tadawul All Share Index, which rose 1.1 percent in Riyadh. Seventeen analysts rate the stock a buy, four recommend holding it and one rates it a sell, according to data compiled by Bloomberg.