30/04/2026 05:08 AST
Saudi Basic Industries Corp. returned to profit in the first quarter of 2026, posting net earnings of SR13.2 million ($3.52 million) compared with a SR1.21 billion loss a year earlier.
In a filing on the Saudi Exchange, the Riyadh-based chemical producer, also known as SABIC, said its adjusted net income - calculated as net cash from operating activities minus capital expenditure - stood at SR816 million.
The company attributed the rise in net profit to a decline in other operating expenses, along with continuous efforts in cost control and restructuring initiatives.
The turnaround comes as SABIC pursues asset sales and restructuring measures to improve capital allocation and strengthen profitability amid persistent pressure on the global petrochemicals sector.
Faisal Al-Faqeer, CEO and executive board member of SABIC, said: "In the first quarter of 2026, we continued to make meaningful progress according to our strategic agenda of portfolio optimization, corporate transformation, and selective growth."
He added: "At the core of this progress is our unwavering commitment to operational excellence, with environment, health, safety, and security remaining top priorities."
According to the statement, SABIC's revenue stood at SR26.15 billion, representing a 10.65 percent annual decline, and a 6.4 percent quarter-on-quarter fall.
The company added that the decrease in revenue was primarily driven by lower sales volume and lower average selling prices year on year.
SABIC's earnings before interest, taxes, depreciation, and amortization stood at SR4.15 billion in the first quarter, an increase of 36 percent compared to the previous three months.
The company's adjusted earnings per share by the end of the first quarter stood at SR0.27. SABIC's free cash flow turned negative at SR270 million in the first quarter of 2026 due to higher working capital.
"In terms of selective growth, we are advancing a number of capital projects in a disciplined way. The execution of the SABIC Fujian project continues as planned, now reaching approximately 98 percent completion," said Al-Faqeer.
The CEO further said that the company is following through on the two agreements announced at the start of the quarter to divest its European Petrochemicals business and Engineering Thermoplastics business in the Americas and Europe.
In January, SABIC agreed to sell its European petrochemicals business to investment firm AEQUITA for $500 million and its engineering thermoplastics operations in the Americas and Europe to turnaround specialist Mutares for $450 million.
"These decisive actions are aligned with our strategy to enhance capital allocation, strengthen SABIC's financial resilience, and position the company for growth in profitable markets," he added.
SABIC, one of the world's largest petrochemical producers, is 70 percent owned by Saudi Aramco, with the remainder publicly traded on the Kingdom's stock exchange.
Arab News
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