Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, reported a 2.5 percent increase in third-quarter profit, missing analysts’ estimates. The shares dropped.
Net income rose to 6.47 billion riyals ($1.73 billion) from 6.31 billion riyals a year earlier, the Riyadh-based company known as Sabic said in a statement to the Saudi stock market today. The mean estimate of 10 analysts was for a profit of 6.56 billion riyals, according to data compiled by Bloomberg.
“The increase in net income is attributable to an increase in quantities sold, favorable prices for certain products and lower financial charges despite lower other income,” according to the company. Third-quarter sales 48.8 billion riyals compared with 44.8 billion a year earlier, Chief Financial Officer Mutlaq al-Morished told reporters in Riyadh.
Lower petrochemicals prices linked to sluggish demand in a struggling global economy affected profit at Sabic affiliates. Saudi Arabian Fertilizer Co. reported a 36 percent decline in third-quarter profit as urea prices fell.
Sabic, which in 2007 bought General Electric Co.’s plastics unit for $11.6 billion, said in April it plans to cut about 1,050 positions and close some assets in Europe because of lower demand. Chief Executive Officer Mohamed Al-Mady told reporters in the same month that Sabic is interested in investment possibilities in North America.
The company last month raised $1 billion in its first dollar-bond deal since 2010 after investors placed orders worth more than five-times the issue’s size. Sabic’s credit default swaps, or contracts insuring the company’s debt against default for five years, are at a record low, having fallen 24 basis points this year to 79 last week.
The shares dropped as much as 2.9 percent, the biggest intra-day decline since July. The stock have climbed 14 percent this year compared with a 19 percent gain for the benchmark Tadawul All Share Index.