RIYADH, (Reuters) – Saudi Arabian Basic Industries Corp (SABIC) , one of the world’s leading chemical firms, said its net profit skyrocketed in the fourth quarter, thanks to higher prices and sales volumes for most its products.
SABIC made 4.58 billion riyals ($1.22 billion) in net profit the three months to the end of December up from 311 million riyals the previous year, the firm said in a statement.
The figure was above the highest forecast in a Reuters survey, which ranged from 3.21 billion riyals to 4.42 billion riyals.
“The increase in fourth-quarter net profit … stemmed from an increase in prices and sales volumes of most petrochemical products, plastics and metals,” SABIC said.
It did not give details on the performance of these products and Chief Executive Mohamed Al-Mady declined to give details, saying only the firm would hold a press conference on Wednesday.
Operating income surged 359 percent to 7.8 billion riyals in the fourth quarter, it said.
It was SABIC’s highest quarterly net profit in five quarters, since before the global crisis started to seriously hurt its margins, forcing it to shut some plants and cut costs.
The global slowdown could not have come at tougher time for the state-controlled firm, which had been struggling to digest the purchase of the plastic unit of General Electric for a staggering $11.6 billion, a deal that drew it harsh criticism by several Saudi investors.
SABIC’S earnings serve as a yardstick for earnings of other petrochemical majors such as Germany’s BASF and Dow Chemical.
But unlike many of these firms, SABIC’s margins tend to be a lot wider since it has access to cheaper feedstock in the world’s largest holder of crude reserves.
Earnings per share for all of 2009, however, reached 3.03 riyals, below half their 7.33 riyals level in 2008.
“SABIC succeeded … to withstand the repercussions of the global economic crisis and preserve its strong credit rating,” Chairman Prince Saud bin Abdullah bin Thunayan said.