18 January 2011 16:17 [Source: ICIS news]
TORONTO (ICIS)--SABIC reported 2010 fourth-quarter net income of Saudi riyals (SR) 5.81bn ($1.55bn, €1.17bn), up 27% year on year, the Saudi Arabia-based petrochemical major said on Tuesday.
SABIC attributed the improvement in its results to higher sales prices for most of its products as well as a strong operating performance.
In a brief statement, SABIC said that income from operations for the quarter ended 31 December was SR10.01bn, up 29% from SR7.78bn in the same quarter in 2009. It did not disclose sales results.
SABIC's fourth-quarter net income rose 9% from the SR5.33bn it reported in the 2010 third quarter.
Analysts at New York-based equity research firm Alembic Global Advisors said the main commodities produced by SABIC had seen sequential pricing gains averaging around 15% in the fourth quarter, leading to much of the 9% sequential net income gain.
Alembic's analysts added that SABIC had a “good quarter”, even though fourth-quarter results were not a “blow-out”.
Alembic said it believed that a peak in the commodity chemical cycle was imminent and could be reached as early as 2013.
The analysts estimated that under peak conditions, SABIC could see its earnings before interest, tax, depreciation and amortisation (EBITDA) rise from 2010 levels of SR47.4bn to SR70.2bn. According to Alembic, such an earnings leverage “is not being appreciated by the market”.
SABIC reported full-year net income of SR21.59bn, up more than two-fold from the SR9.07bn in 2009.
($1 = SR3.75, €1 = SR4.98)
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