World Economy

Sabic Q3 Profit Falls 9.4%

Sabic Q3 Profit Falls 9.4%Sabic Q3 Profit Falls 9.4%

Saudi Basic Industries Corp, one of the world’s largest petrochemicals groups, reported a 9.4% drop in third-quarter net profit on Sunday, extending a profit slump as product sales prices declined, Reuters reported.

Sabic made a net profit of SR5.6 billion ($1.49 billion) in the three months to September 30, down from SR6.18 billion in the year-earlier period, the company said in a bourse statement.

Cost cutting enabled Sabic to limit the impact of a 23% drop in third-quarter sales on its bottom line, the petrochemical producer’s acting chief executive said.

The firm’s third-quarter sales were SR37.3 billion ($9.95 billion), down from SR48.7 billion a year earlier, Yousef Abdullah Al-Benyan told a news conference in Riyadh.

This was a larger profit than analysts had on average forecast and Al-Benyan described Sabic’s earnings as “very positive given global economic conditions”.

He said Sabic had reduced its costs by an average of 22% in the first nine months of 2015 through improved efficiency, but did not provide further details.

Al-Benyan said Sabic could deal with any cuts to subsidies or changes to gas feedstock prices.

Lower oil prices have hurt Sabic’s earnings, with the company’s profits also falling in the preceding four quarters, Reuters data shows.

The company’s results are closely tied to oil prices and global economic growth because its products—plastics, fertilisers and metals—are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.