Oil & Gas Sabic slumps to loss as petrochem prices slide By Matt Smith November 2, 2023 Sabic A Sabic manufacturing site in Jubail. The company reported a big loss in the third quarter SAR2.88bn loss in Q3 Blames ‘stagnation in global demand’ Big non-cash loss on Hadeed stake sale Petrochemicals producer Saudi Basic Industries Corporation (Sabic) swung to a net loss in the third quarter, hit by a slump in product prices, a loss from offloading a subsidiary and a hefty impairment on its European operations. Sabic, 70 percent owned by Saudi Aramco, made a net loss of SAR 2.88 billion in the three months to September 30. That compares with a profit of SAR 1.84 billion in the prior-year period, the company said in a statement to Riyadh’s bourse on Thursday. Petrochemicals producer in $40m blow Sabic to sell steel subsidiary to PIF for $3.3bn Borouge quarterly profit falls 9% on lower sales prices Revenue declined 17 percent to SAR 35.98 billion as operating profit halved. Sabic blamed its quarterly net loss on a “stagnation in global demand for chemicals, which led to a decrease in average selling prices”. Petrochemical product prices normally track those of oil, so steady crude prices should have supported margins for Saudi Arabia’s producers, which benefit from subsidised feedstocks. But oversupply and muted demand from major buyers such as China depressed petrochemical product prices, and margins among Saudi Arabia’s manufacturers have tumbled to 20-year lows. The company made a non-cash loss of SAR 2.93 billion on its sale of its entire stake in Saudi Iron and Steel Company (Hadeed) to the state-owned Public Investment Fund. Sabic, which announced the Hadeed sale on September 3, also took a SAR 255 million impairment on its European operations. The company, the world’s seventh-largest petrochemicals maker by annual sales according to S&P Global, made a nine-month net loss of SAR 1.04 billion. That compares with a net profit a year earlier of SAR 16.24 billion.