UpdateSaudi's SABIC shares gain up to 3.4% on strong Q3 profit

18 October 2010 10:55  [Source: ICIS news]

SaudiSINGAPORE (ICIS)--Saudi Basic Industries Corp (SABIC) shares were trading higher on Monday after the company reported a 46% year-on-year surge in third-quarter earnings.

At 17:18 hours Singapore time (09:18 GMT), SABIC gained 2% at Saudi riyals (SR) 90.75, off the intra-day high of SR92.00, at the Saudi Stock Exchange (Tadawul).

Petrochemical giant SABIC reported late on Sunday a sharp increase in September-quarter net profit to SR5.33bn on the back of improvement in production and sales, as well as better prices for most products.

SABIC said that its overseas affiliates performed better during the quarter, making up for the decline in prices of some products. Compared to the previous quarter, the company's net profit was up 6%.

Its income from operations soared 41% year on year to SR8.98bn.

For the first nine months of the year, SABIC's net profit stood at SR35.54bn, up 93% compared to the same period in 2009, it said. Income from operations surged to SR27.82bn from SR10.82bn over the same period.

HSBC Global Research had said in a recent industry report that SABIC's strength lies in company's "very diverse produce portfolio", which would allow it to tap into more growth opportunities that may not be open to other Middle Eastern petrochemical players.

"We believe it [SABIC] will lead the regional industry in its move towards more differentiated products just as it spearheaded the development of the commodity chemicals industry in the region," HSBC said in its mid-September report.

"Given its scale, global footprint, access to growth opportunities and ability to deploy capital, we believe SABIC remains a core holding in the regional petrochemical sector," the report stated.

Additional reporting by Nurluqman Suratman

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By: Pearl Bantillo
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