18 July 2012 10:09 [Source: ICIS news]
SINGAPORE (ICIS)--SABIC’s net income fell 35% year on year to Saudi riyal (SR) 5.3bn ($1.41bn) in the second quarter of this year, weighed by lower product prices and higher feedstock costs, despite higher production and sales volumes, the chemicals major said on Wednesday.
The company’s income from operations fell by 29% year on year to SR9.43bn in the April-June period, while its gross operating profit dipped by 23% to SR12.72bn, the company said in a statement.
“The second-quarter results were affected by several factors. The most important was the continuous slowdown in global economic growth, especially in Europe, ?xml:namespace>
“As a result of the global economic slowdown customers seek to reduce the size of their inventory of petrochemical products in anticipation of the decline of prices for these products worldwide. This adds additional pressure on the prices of these products,” it said.
Scheduled maintenance during the second quarter at some of its plants, especially its petrochemical, fertilizers and metals units, also weighed on its earnings, the company added without elaborating further.
Meanwhile, SABIC’s net income for the six-month period ending 30 June this year fell by 20% year on year to SR12.6bn, while income from operations fell by 19% to SR20.9bn.
Looking ahead, the company said it expects customers to increase the volume of inventories in the third quarter of 2012.
“In addition, some high-cost producers will decrease their production levels, which [will] help to return back the balance in the market.
“Under these variables, we will be focusing on the reliability of operations to improve the operating costs and to introduce new products with higher returns from our innovation centres around the world. We expect a positive impact on the future results,” it added.
($1 = SR3.75)
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