Saudi Basic : SABIC achieves SR 4.74 billion profit in Q2 2016, exceeding analysts’ expectations

28 Jul 2016

SABIC has announced a net profit of SR 4.74 billion for Q2 2016, as against SR 6.17 billion in the same period last year, a decrease of 23.18 percent, and an increase of 39 percent as against SR 3.41 billion in the previous quarter.

The results were revealed in the consolidated financial results for the period ended June 30, 2016. The gross profit for the second quarter amounted to SR11.02 billion, compared to SR 12.72 billion for the corresponding quarter of the previous year, a decrease of 13.36%, and compared to SR 8.39 billion for the previous quarter, an increase of 31.35%. The operational profit during the second quarter amounted to SR 6.95 billion, compared to SR 9.38 billion for the corresponding quarter of the previous year, a decrease of 25.91 percent, and compared to SR 5 billion for the previous quarter, an increase of 39%.

According to SABIC, the net profit for the six months amounted to SR 8.14 billion, compared to SR 10.11 billion for the same period last year, a 19.49% decrease. Dividends per share for the six months were SR 2.71, compared to SR 3.37 for the same period last year. The gross profit during the six months amounted to SR 19.41 billion, compared to 22.17 billion for the corresponding period last year, a 12.45% decrease. The operating profit during the six months totaled SR11.95 billion, compared to SR 15.51 billion for the same period last year, a 22.95% decrease.

SABIC attributed the decline in the 2016 second quarter earnings, compared to the same quarter of 2015, to a drop in the average selling prices of the products. In addition, a loss allocation in the value of machinery and equipment of Ibn Rushd, amounting to SR 761 million, was recorded in the results, of which SABIC share amounted to SR 366 million. A decrease in cost of sales has also been referred to.

SABIC also attributed the decline in profits for the six-month period of 2016, compared to the same period in 2015, to a drop in the average selling prices of the products, with a marked decline in prices in the metals sector. In addition, SR 761 million losses in the value of machinery and equipment of Ibn Rushd were recorded in the results, of which SABIC share amounted to SR 366 million, along with a rise in the Zakat allocation. SABIC also referred to a decrease in sales cost and a rise in other incomes.

The main reason for the rise in the earnings of Q2 2016, compared to the previous quarter of the same year, is due to an increase in the average selling prices of products, with an improvement in metal prices - in spite of recording SR 761 million losses allocation in the value of machinery and equipment of Ibn Rushd, of which SABIC share amounted to SR 366 million.

Element	Current Quarter	Corresponding Quarter for previous year	% current change	Previous Quarter	% Previous change
Net Profit/Loss	4.74	6.17	-23.18	3.41	39
Gross Profit/Loss	11.02	12.72	-13.36	8.39	31.35
Operational Profit/Loss	6.95	9.38	-25.91	5	39
All figures in SR billion

Element	Current period	Corresponding period for previous year	% change
Net Profit/Loss	8.14	10.11	-19.49
Gross Profit/Loss	19.41	22.18	-12.45
Operational Profit/Loss	11.95	15.51	-22.95
Dividends per share	2.71	3.37	-

The interim financial results table for the period ended June 30, 2016 (six months)

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