SABIC swings to Q1 loss amid rising costs

Saudi chemicals giant SABIC reported a first-quarter net loss of 1.21 billion Saudi riyals ($323 million), driven by rising operating and feedstock costs. This marked a sharp contrast to a profit of 250 million riyals ($66 million) in the same period last year. The chemicals sector continues to struggle with weak demand and high input costs, which have resulted in lower prices and squeezed margins.

The company saw a significant decline in EBITDA, which fell by 30% quarter-over-quarter and by 45% year-over-year, reaching 2.5 billion riyals ($670 million). Despite the financial setback, SABIC reported a 5.8% increase in first-quarter sales, reaching 34.59 billion riyals ($9.23 billion) up from 32.69 billion riyals ($8.71 billion) in the same period last year.

CEO Abdulrahman Al-Fageeh highlighted ongoing global economic challenges, including a slowdown in global GDP, and the persistent issue of oversupply in petrochemical production capacity. The company’s losses were further exacerbated by a non-recurring cost of 1.7 billion riyals ($453.22 million) linked to a strategic restructuring initiative.