Saudi Basic Industries Corp. has reported a 13 percent rise in total revenue to SR198.47 billion ($52.88 billion) in 2022, up from the SR174.88 billion recorded in 2021.
According to a bourse filing, however, the company’s net profit fell by 28.35 percent to SR16.53 billion in 2022, due to a lower profit margin amid rising distribution costs.
“SABIC 2022 results remain strong despite challenging market conditions. Our sales volumes continue to grow, exceeding the previous year’s sales by 9 percent and driven by growth projects, improved reliability, inventory optimization and synergies with Saudi Aramco,” said Abdulrahman Al-Fageeh, SABIC’s acting CEO.
In a statement given to the Saudi stock exchange, SABIC said the decrease in its net income is mainly attributable to lower profit margins for most of its key products which were driven by higher feedstock prices in addition to an increase in selling and distribution costs.
The company’s earnings before interest, taxes, depreciation and amortization for 2022 stood at SR38.57 billion, a 20 percent fall compared to 2021.
The Tadawul statement further noted that SABIC’s income from operations was SR23.88 billion in 2022, 29 percent lower than the previous year.
Compared to the third quarter of 2022, revenue decreased by 8 percent to SR42.98 billion in the fourth quarter, while net income fell 84 percent to SR290 million.
During a press conference after announcing the financial results, SABIC said that prices across the main petrochemicals segments, chemicals, polyethylene and performance polymers came in lower in the fourth quarter, and added that the margins are expected to continue being under pressure in the first half of 2023, primarily due to slow demand.
SABIC also reaffirmed its commitment to ensuring sustainability during the press conference.
Highlighting its operations in the renewable energy sector, SABIC said that it shipped 50 kilometer tons of blue ammonia from Saudi Arabia to South Korea, representing a new milestone in the development of decarbonization solutions.
Al-Fageeh added: “We are unveiling a target of one million metric tons of TRUCIRCLE solutions by 2030, which shows our ongoing commitment to sustainability and innovation. Driving circularity for plastics requires a rapid transformation of the entire value chain.”
According to Al-Fageeh, SABIC’s focus on capex discipline resulted in 7 percent below 2021 spend.
“Maximizing shareholder returns remains a priority with 6.25 percent higher declared cash dividend in 2022,” he added.
SABIC, in its statement, further pointed out that the global gross domestic product growth rate in 2023 is now estimated at 2.1 percent.
It was in June 2020 that energy giant Saudi Aramco bought a 70 percent stake in SABIC from Saudi Arabia’s sovereign wealth fund.
During the press conference, the company said that synergies associated with its ties to Saudi Aramco through 2022 were worth $735 million.