Saudi petrochemical company SABIC makes a profit of $411 million after losses
Saudi Baic Industries Corp (SABIC), a large petrochemical company, made a profit of $410.7 million (SAR 1.5 billion) in 2024. This is a big improvement compared to the previous year, when the company had a loss of $738.7 million (SAR 2.8 billion).
Full-Year Performance
SABIC’s return to profit in 2024 was mainly due to lower losses from stopped operations, higher earnings from its business activities, and lower zakat expenses following new regulations.
SABIC, which is 70% owned by Saudi Aramco, reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $5.2 billion (SAR 19.5 billion) for 2024. This is a small increase compared to $5.1 billion (SAR 19 billion) the year before. Its EBITDA margin went up to 13.9%, from 13.4% in 2023.
SABIC’s revenue fell by 1% from last year to $37.3 billion (SAR 139.98 billion), as lower sales volumes were not fully offset by higher selling prices.
CEO Abdulrahman Al-Fageeh explained that the petrochemical industry was helped by lower interest rates, but overproduction, especially of polymers, continues to be a problem. He also mentioned that the demand for ethylene is growing slower than the available production, putting pressure on the company’s capacity to use its factories effectively. Despite these challenges, SABIC kept a stable EBITDA margin, showing its ability to handle tough market conditions.
Fourth-Quarter Loss
In the fourth quarter of 2024, SABIC reported a larger-than-expected loss of $504.1 million (SAR 1.9 billion). This was due to weak demand and high costs of raw materials, which hurt profit margins. The loss was bigger than the $461.4 million (SAR 1.7 billion) loss in the same period the year before. Analysts had expected a smaller profit of around $266.7 million (SAR 1 billion).
Outlook
SABIC expects to spend between $3.5 billion and $4 billion on capital investments in 2025, which is lower than its previous estimate of $4 billion to $5 billion for 2024.
The petrochemical industry is facing weak global demand and high production costs, which are affecting profits. Overproduction, especially in polymers, continues to strain production rates, which impacts profitability, despite some signs of improvement in financial conditions.
Published: 27th February 2025
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