SABIC's first quarter turns red

22-Apr-09

SABIC, one of the world's largest petrochemicals manufacturers, witnessed a Q1 net loss amounting SAR 0.974 bln (approximately US$0.254 bln) for period ending March 31, 2009 as against net income of SAR 6.924 bln (US$1.849 bln) in the same period of 2008. Mohamed Al-Mady, SABIC Vice Chairman and CEO, said: "The financial and economic crisis that hit the world's major economies, and the credit crunch have led to difficulties for customers accessing credit facilities from banks and financial institutions. This has contributed to the decline in demand for petrochemical products and metals, in particular engineering plastics, which have been impacted by the recession in the automotive, construction and electronic industries." The Q1 net loss includes a 'non-cash' charge related to the impairment of goodwill amounting to SAR 1.181 bln. SABIC indicated that company's total production levels for the period increased 0.39% to 14.17 mln tons and sales volumes surged a mere 5% to 11.53 mln tons over the same period in 2008. In response to unsatisfactory demand, the company indicated strong cost reduction steps including trimming outputs, employee lay-offs and plant close downs to ride through the difficult times.