Saudi Basic Industries Corp (SABIC), the world's largest chemical producer by market value, posted a 54 percent rise in its third-quarter net profit, beating analyst expectations on the back of high product prices and continued strong global demand.
SABIC had indicated earlier this year that it expected demand for its products, which include chemicals, industrial polymers, fertilisers and metals, would be robust for the rest of the year.
The company made a record net profit of SR8.2bn ($2.2bn) in the three months ended September 30, compared with SR5.3bn in the same period a year earlier.
"The best quarter in SABIC history is this quarter," chief executive Mohammed al-Mady told a news conference on Monday.
Five analysts surveyed by Reuters had expected the company to post on average SR7.9bn in third-quarter profit.
Mady also said the firm's sales in the quarter were SR49bn, compared with SR38bn in the same period of 2010.
SABIC, 70 percent-owned by the Saudi government, benefits from access to cheap energy, giving it a competitive advantage over global rivals.
One of its rivals, Dow Chemical Co, the largest US chemical maker, has yet to announce its quarterly earnings but has beaten estimates each quarter in the past year.
In January, SABIC said it expected higher sales and profitability this year and throughout 2012 as petrochemical prices returned to pre-crisis levels and further output capacity was added.
Shares in SABIC have dropped more than 12 percent this year and closed trade on Monday at 91.75 riyals, underperforming the Saudi market index, which has dropped 8 percent since the beginning of the year.
Mady said demand for the company's products remained good despite instability in the global economy, and specifically that he had not seen any change in demand from China so far.
Asked whether SABIC might change its investment plans because of economic uncertainty, Mady replied, "As a matter of fact, when the economic situation gets bad, it is time to invest."
He said the company had no plans to issue bonds this year.For all the latest industry 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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