Saudi Basic Industries Corp. (SABIC) has failed to meet the projected Q4 earnings forecasts, amid the U.S. mortgage crisis that has upset demand for chemicals from automotive and construction sectors, higher feedstock costs due to swelling oil prices, as well as the cost of financing its US$11.6 billion acquisition of GE Plastics. This has brought to an end the series of record profits that began in 2006. SABIC's Q4 profit rose 12.3% to 6.87 bln riyals (US$1.83 bln), against forecasts ranging between 8.38 bln riyals to 9.1 bln riyals. For 2007, SABIC made a net profit of 27 bln riyals - increasing 33% from 2006. SABIC has included a full quarter of GE Plastics earnings in its financials for first time in the three months to December 31.
SABIC hopes to offset the decline in growth in United States with increasing demand from India, China and the Middle East.