Saudi Basic Industries Corp (Sabic), the world's largest petrochemicals firm by market value, on Tuesday brought the Saudi stock market down by posting a 95.5 percent fall in fourth-quarter profit because of the global slowdown. The shocking performance sent the Tadawul All-Share Index (TASI), down 2.41 percent to close at 4,544.29. Sabic declined 9.79 percent to SR40.50 losing SR4.40. “The petrochemicals industry is undergoing fluctuations in economic activity, from expansion in profits to a contraction,” said Muhammad Al-Madi, Deputy Chairman and CEO of Sabic, at a press conference here. The rise in oil prices last year has had a negative impact on the industry, which eventually affected the performance of the company in the third quarter of 2008, he said, adding that the current low prices of oil have also not helped the industry due to weak global demand from the credit crunch. Al-Madi said Sabic has taken precautionary measures to curb its losses by temporary shutting down some factories, reducing production in others, and restructuring some Sabic companies. The company has laid off 1300 employees, including 300 in Europe. Sabic's net profit in the three months to Dec. 31 fell to SR311 million ($82.9 million) compared with SR6.87 billion ($1.83 billion) a year earlier, the company said. The quarterly profit marked a 95.7 percent drop from the previous quarter when Sabic made a net profit of SR7.24 billion ($1.93 billion), it said. Sabic attributed the result to “the decline in demand for petrochemical products and metals because of the economic recession.” It also blamed the global credit crunch that has “led to difficulties for consumers in obtaining the necessary financial facilities from banks and financial institutions.” “The decline in demand for petrochemical products, particularly specialty plastics ... has had a strong impact on Sabic affiliates.” __
