Saudi Basic Industries Corp (SABIC), one of the world's largest petrochemicals groups, reported a 23.2 percent drop in second-quarter net profit on Wednesday, extending a earnings slump as lower sales prices continued to weigh.
SABIC made a net profit of 4.74 billion riyals ($1.26 billion) in the three months to June 30, down from 6.17 billion riyals in the year-earlier period, the company said in a bourse statement.
The result was ahead though of the 3.92 billion riyal average estimate of five analysts polled by Reuters.
SABIC, which is 70 percent state-owned, attributed the profit fall to lower average sales prices, in addition to an impairment on the assets of Ibn Rushd, an affiliate of SABIC.
Lower oil prices have adversely affected SABIC's earnings, with the company's profits falling in the seven preceding quarters, Reuters data shows.
The company's results are closely tied to oil prices and global economic growth because its products -- plastics, fertilisers and metals -- are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.
Saudi's petrochemical companies, which for years benefited from subsidised gas feedstock prices versus competitors from non-energy producing countries, are also having to adjust to government energy and gas feedstock reforms which will raise their costs.
From the first quarter of 2016, SABIC's total annual costs before minority interests will rise by around 5 percent.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.