Saudi Basic Industries Corp (2010.SE), the world’s fourth-biggest petrochemicals firm, reported a third straight quarterly loss on Thursday and said low oil prices and weak global growth meant the second half would likely be similar to the first.
SABIC reported a net loss of 2.2 billion riyals ($586.6 million) in the second quarter on impairments and a drop in sales, far wider than the mean 40.85 million riyal loss forecast by four analysts in a Refinitiv Eikon poll.
Chief Executive Yousef al-Benyan said on Thursday that the company had taken the maximum hit from the coronavirus pandemic in the second quarter, and that SABIC’s business had started to see slight improvement in July and August.
“Hopefully this is something positive, but other challenges still persist,” he told an earnings briefing.
“The future of demand is driven by uncertainties in the energy market. Market conditions are going to put pressure on the chemical industry for the remainder of this year,” he said.
SABIC blamed 1.18 billion riyals in impairments on capital assets and lower average selling prices and sales volumes for the second-quarter loss, which compared to a net profit of 2.03 billion riyals a year earlier.
Benyan said average petrochemical prices had fallen 27% year-on-year in the second quarter and 18% from first-quarter levels. SABIC had maintained production levels in the period.
Saudi oil producer Aramco (2222.SE) completed its purchase of a 70% stake in SABIC for $69.1 billion in June and extended the payment period by three years to 2028, providing a cushion against weak oil prices.