SABIC expects Q4 earnings to be hit by slowdown

Saudi Basic Industries Corp (SABIC) said on Monday it expects its fourth-quarter earnings to be hit by a rapid slide in prices and a slowdown in demand due to the global financial crisis.

SABIC posted its first quarterly decline in profits in more than two years in the third quarter.

"The prices curve nosedived from September 1 to today ... Prices of polypropylene and polyethylene for instance were above $2,000 now they are below $1,000," chief executive Mohamed Al-Mady said in a telephone interview.

Demand is receding, he said. "No one saw this coming."

The firm was expecting a global slowdown in both demand and prices to start affecting the market in 2009, he said.

"The financial crisis has brought this forward ... It turned out to be more serious than initially thought," Mady said.

The decline in demand will bring costs down, Mady said, but the decline in costs will not be enough to compensate a drop in revenues resulting from lower prices, Mady said.

"No way, it will not help. But it's not all doom and gloom," he said. (Reuters)

Print | Email | Discuss this article |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM