SABIC expects higher sales and profitability in 2011 and throughout 2012

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.
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