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Wed 21 Jul 2010 09:30 PM

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Saudi SABIC Q2 sales growth slows as prices fall

Annual rise in net profit from new output was below analysts' forecasts for the period.

Saudi SABIC Q2 sales growth slows as prices fall
SALES SLOWED: Saudi Basic Industries Corp said that sales growth slowed in Q2 as product prices fell. (Getty Images)

Petrochemical giant Saudi Basic Industries Corp (SABIC) said sales growth slowed in the second quarter as prices for its products fell.

SABIC, the world's biggest chemicals maker by market value, said its inventories surged by around a third due to a slowdown in demand.

The annual rise in net profit came from new output that came on stream but it was below analysts' forecasts for the period as weaker prices ate into margins.

Second quarter sales stood at $10.36 billion, up 64 percent from year on year, but down from 72 percent during the previous quarter.

Profits from petrochemicals inched down to $1.64 billion in the second quarter from $1.65 billion in the first quarter.

Steel profit fell to $74.6 million in the second quarter down from $141.3 billion a quarter earlier.

Mutlaq al Morished, chief financial officer, has said inventories would pose less of a problem during the second half.

SABIC raised its output during the second quarter with the start of commercial operations at its Yansab, Sharq affiliates and at a China based joint venture.

Analysts say global demand eased during the second quarter compared to the first with the entry of new production capacity. (Reuters)

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