Arab News, Wednesday, Mar 01, 2023 | Sha'ban 09, 1444
SABIC’s revenue rises by 13% to $53bn in 2022
Saudi Arabia:
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.