Saudi Basic Industries Corp (SABIC) expects higher sales and profitability in 2011 and throughout 2012 as petrochemical prices return to pre-crisis levels and further output capacity is added. The world's biggest petrochemicals firm by market value gave the upbeat outlook after broadly meeting analysts forecasts with a 27% increase of net profit.
In the last three months SABIC net profit was 5.81 billion riyals, lower than the previous quarter. Sales for Q4-10 rose to 41 bln riyals after 31.9 bln riyals a year ago. SABIC usually does better in terms of profitability than rivals because it pays a government subsidised 75 cents per million BTU for gas feedstock, a fraction of the cost on international markets. Production rose in 2010 by 12% to 65 mln tons of petrochemicals last year and the output will further increase as new units will go online. SABIC's affiliate Saudi Kayan Petrochemicals is to start commercial production in H2-11, with capacity expansion planned at Yansab, Sharq, and Tianjin joint-venture with Sinopec.