Chemical giant boosts profits in third quarter

SAUDI Basic Industries Corp (SABIC) beat forecasts with a 46 per cent rise in third-quarter profit on higher plastic and petrochemical sales, and looked set for at least the same profit level in the fourth quarter.

The world’s largest chemical firm by market value made a net profit of 5.33bn riyals (£889m) in the three months to 30 September, up from 3.65bn riyals a year earlier, and 5.02bn riyals in the second quarter.

SABIC’s earnings are a yardstick for rivals such as Dow Chemical and Germany’s BASF.

The earnings exceeded by close to five per cent the 5.09bn riyals average forecast by analysts earlier this month.

“We benefited from a rise in prices in the second quarter and the first month of the third quarter... Prices rose in the last two months of the third quarter as oil prices rose... Demand was stable on a global level,” said chief executive Mohamed Al-Mady.

High oil prices are positive for petrochemical firms because they increase petrochemical product prices, and SABIC usually does better in terms of profitability than rivals because it purchases feedstock at lower prices.