RIYADH – Saudi Basic Industries Corp. (Sabic), the world's biggest petrochemicals group by market value, posted an 11.3 percent rise in fourth quarter net profits Saturday. The chemicals, metals and fertilizers conglomerate earned net income of SR5.83 billion ($1.55 billion) in the three months ending December 31, compared to its profit of SR5.24 billion a year ago, it said in a bourse statement. Its full-year performance, with net income of SR24.7 billion, represented a fall of 15.5 percent from 2011, when the company enjoyed successive quarters of record performance. The fourth-quarter results marked a 7.6 percent fall from its third quarter net earnings. Sabic, 70 percent state-owned, cited a “higher cost of sales and lower sales prices for certain products, despite higher sales and production volumes and reduction in financial charges” for its fall in 2012 net income. The gain in profit “was mainly because of higher prices in the fourth quarter,” said Ahmed Shams El Din, Cairo-based director of equity research at EFG-Hermes Holding. EFG-Hermes had earlier forecast profit of SR6.4 billion. Sabic shares have advanced 3.9 percent this year, compared with a 3.6 percent increase in the benchmark Tadawul All Share Index. The quarterly profit increase was Sabic's first in 2012. Full-year net income for the maker of fertilizers, plastics and steel declined 16 percent to SR24.7 billion, highlighting the company's struggle amid slowing economies in Europe and a resurgent US chemical industry. Europe's economic woes also reduced demand for Sabic. The World Bank cut its 2013 global growth forecast this month to 2.4 percent from 3 percent. It projected a second year of contraction in the euro region. Sabic said the decline in annual profit was because of “higher cost of sales and lower sales prices for certain products despite higher sales and production volumes and reduction in financial charges.” Income from operations for the fourth quarter increased 7.5 percent from a year earlier to SR10.2 billion. It had earnings per share of SR8.24 in 2012, compared with SR9 the previous year. Petrochemical and plastic products represented 75 percent of the Kingdom's non-oil exports in November, according to data from the Central Department of Statistics and Information in Riyadh. Asia was the top destination for non-oil exports at 40 percent, followed by the Middle East at 29 percent. Subsidiaries also suffered from shutdowns. Saudi Kayan Petrochemical Co. (Kayan) fell the most in six months on Jan. 13 after quarterly results for the affiliate of Sabic missed estimates for the eighth consecutive time. Saudi Kayan's fourth-quarter loss widened to SR195 million from SR191 million in the year-earlier period. Saudi Arabian Fertilizer Co. (Safco) is 43 percent owned by Sabic and Yanbu National Petrochemicals Co. (Yansab) is 51 percent owned. Both also reported a decline in quarterly earnings. — SG/Agencies
