Saudi Basic Industries Corp (SABIC), one of the world's largest petrochemicals groups, reported a 13.2 percent drop in first-quarter net profit on Monday, extending a profit slump but beating analysts' forecasts.
SABIC made a net profit of 3.41 billion riyals ($909.4 million) in the three months to Mar. 31, down from 3.93 billion riyals in the year-earlier period, the company said in a bourse statement.
Five analysts polled by Reuters had on average forecast that SABIC would make a quarterly profit of 2.84 billion riyals.
SABIC, which is 70 percent state-owned, attributed the profit fall to lower average sales prices, noting that the net loss for the metals segment amounted to 725 million riyals. It said the cost of sales dropped during the period.
Lower oil prices have adversely affected SABIC's earnings, with the company's profits falling in the six 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 benefited from subsidised gas feedstock prices versus competitors from non-energy producing countries, have said government changes to energy and gas feedstock prices announced in December 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.
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