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Tue 23 Oct 2007 12:07 PM

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Sabic posts fifth consecutive record profit

World's largest chemical firm sees Q3 net income surge 37% to $1.97bn, beating forecasts.

Saudi Basic Industries (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 September 30 surged 37% to 7.4 billion riyals ($1.97 billion), beating forecasts.

The quarter included earnings of the plastics unit of General Electric, which Sabic agreed in May to buy for $11.6 billion. The EU approved the takeover in August.

Output including steel, chemicals and fertiliser, rose 13% to 40.9 million tonnes in the firat nine months and sales rose 13% to 32.6 million tonnes, state-controlled Sabic said in a statement on the Saudi bourse website. 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 September 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 tonne, ranged from $1,250 per tonne to $1,300 per tonne in the third quarter, compared with $1,100 per tonne to $1,200 per tonne in the year-earlier period, according to Houston-based Chemical Market Associates (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 tonnes 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 a 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 tonnes in 2005, ranged between $330 per tonne and $350 per tonne in the third quarter, compared with $260 per tonne in the year-earlier period, according to CMAI data. - Reuters

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