- Net income in period dropped more than analysts had expected
- Metals prices are trading near lowest since 2009 on gluts
Saudi Basic Industries Corp. said profit dropped to a six-year low in the fourth quarter as the Middle East’s biggest petrochemicals company was hit by a rout in metals.
Net income in the three months through December slumped 29 percent from a year earlier to 3.08 billion riyals ($821.5 million), the Riyadh-based company said in a statement to the Saudi bourse. That’s lower than the average estimate of 4.16 billion riyals predicted by four analysts, data compiled by Bloomberg show.
Profit fell due to “lower average sales prices, with a sharp decline in the metals segment sales prices,” it said in the statement. Metals have been hit by gluts and a gauge of prices in London is near the lowest since 2009. Saudi Arabia is the biggest oil producer in the Organization of Petroleum Exporting Countries and prices of the fuel have slipped to a 12-year low amid an oversupply.
The company was one of the biggest decliners in the Tadawul All Share Index, losing 3.7 percent to the lowest since 2009 on Sunday. The market closed before the results were announced.
Sabic said last year it would restructure globally to make itself more agile and cost-efficient, and has also announced plans to cut about 140 jobs and integrate some business units. The company, which acquired General Electric Co.’s plastics unit for $11.6 billion in 2007, has 40,000 employees worldwide, according to its website, and plans to expand in China and the U.S.