Saudi Basic Industries Corp. (SABIC), one of the world's largest petrochemicals groups, reported a 13.2% drop in first-quarter net profit on Monday, extending a profit slump but beating analysts' forecasts. SABIC made a net profit of 3.41 billion riyals ($909.4 million) in the three months to March 31, down from 3.93 billion riyals in the year-earlier period, the company said in a bourse statement, Reuters reported. Five analysts polled by Reuters had on average forecast that SABIC would make a quarterly profit of 2.84 billion riyals. SABIC, which is 70% state-owned, attributed the profit fall to lower average sales prices, noting that the net loss for the metals segment amounted to 725 million riyals. It said the cost of sales dropped during the period. Lower oil prices have adversely affected SABIC's earnings, with the company's profits falling in the six preceding quarters. The company's results are closely tied to oil prices and global economic growth because its products—plastics, fertilizers and metals—are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.
