Saudi Basic Industries Corporation (SABIC) has announced the interim consolidated financial results for the period ended June 30th 2012.
The net income for the quarter ended June 30th 2012 was SAR 5.30 billion compared to the net income of SAR 8.10 billion for the same quarter in 2011, representing a decrease of 35% YoY and compared to the net income of SAR 7.27 billion in the previous quarter, representing a decrease of 27% QoQ.
The gross operating profit for the quarter ended June 30th 2012 amounted to SAR 12.72 billion as compared to the same quarter in 2011 of SAR 16.49 billion, representing a decrease of 23% YoY. The income from operations for the quarter ended June 30th 2012 amounted to SAR 9.43 billion compared to SAR 13.28 billion for the same quarter in 2011. This represents a decrease of 29% YoY.
The net income for the six months ended June 30th 2012 was SAR 12.57 billion as compared to the net income of SAR 15.79 billion for the same period in 2011, a decrease of 20% YoY. The earnings per share for the six months ended June 30th 2012 was SAR 4.19 as compared to SAR 5.26 for the same period in 2011.
The gross operating profit for the six months ended June 30th 2012 was SAR 27.25 billion as compared to SAR 31.92 billion for the same period in 2011, a decrease of 15% YoY. The income from operations for the six months ended June 30th 2012 was SAR 20.88 billion as compared to SAR 25.78 billion for the same period in 2011, a decrease of 19% YoY.
The decrease in net income of the quarter and six months ended June 30th 2012 compared to the same periods in 2011 is mainly attributable to lower product pricing and higher raw materials costs for certain products, despite higher production and sales volumes. The decrease in net income of the quarter ended June 30th 2012 as compared to the previous quarter is driven by lower product pricing as well as lower production and sales volumes due to plant maintenance activities.
The second quarter results were affected by several factors. The most important was the continuous slowdown in global economic growth, especially in Europe, China and North America, which negatively impacted the prices of petrochemical products. Also, this period witnessed some of the scheduled plant maintenance activities for some of our plants, especially in fertilizers, metals and some petrochemical plants.
As a result of the global economic slowdown customers seek to reduce the size of their inventory of petrochemical products in anticipation of the decline of prices for these products worldwide. This adds additional pressure on the prices of these products.
SABIC officials said that "In the third quarter, we may see the return of these customers to increase the volume of their inventories. In addition, some high cost producers will decrease their production levels, which help to return back the balance in the market. Under these variables, we will be focusing on the reliability of operations to improve the operating costs and to introduce new products with higher returns from our innovation centers around the world. We expect a positive impact on the future results."
Source - Saudi Basic Industries Corporation
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