RIYADH (Reuters) – Saudi Basic Industries Corp (SABIC), the world’s largest chemical company by market value, posted its fifth consecutive record profit on higher prices for its products and more output.
Net income in the three months to Sept. 30 surged 37 percent to 7.4 billion riyals ($1.97 billion), beating forecasts.
The quarter included earnings of the plastics unit of General Electric Co, which SABIC agreed in May to buy for $11.6 billion. The European Union approved the takeover in August.
Output including steel, chemicals and fertiliser, rose 13 percent to 40.9 million tonnes in the firat nine months and sales rose 13 percent to 32.6 million tonnes, state-controlled SABIC said in a statement on the Saudi bourse Web site. It did not give full details for the third quarter.
Analysts’ forecasts for third-quarter profit ranged from 6.75 billion riyals to 7.23 billion riyals, according to a Reuters survey.
Earnings per share in the nine months to Sept. 30 rose to 8.06 riyals from 5.67 riyals in the year-earlier period, SABIC said.
Asian prices for ethylene, which costs SABIC less than $300 to produce per ton, ranged from $1,250 per ton to $1,300 per ton in the third quarter, compared with $1,100 per ton to $1,200 per ton in the year-earlier period, according to Houston-based Chemical Market Associates Inc (CMAI), which has been consulting to the chemical industry since 1979.
SABIC, which the Saudi government set up in 1976 to reduce the country’s reliance on crude oil sales, made 7.15 million tons of ethylene in 2005, its main product by volume.
Ethylene is a base chemical used to make plastics such as polyethylene for textiles or computer covers. It is linked to oil prices which soared to a record $83.90 per barrel in New York last month.
China import prices for methanol, of which SABIC produced 4.09 million tons in 2005, ranged between $330 per ton and $350 per ton in the third quarter, compared with $260 per ton in the year-earlier period, according to CMAI data.