Shares of Saudi Basic Industries Corp. (SABIC) dropped nearly 3 percent on Saudi Stock Exchange (Tadawul) on Sunday after the blue chip’s H1 2019 net profit fell 55 percent year-on-year (YoY).
By 10.12 am Riyadh time, the scrip declined 2.7 percent to SAR 108, with nearly 500,000 shares, valued at close to SAR 53 million, being traded.
SABIC’s second quarter 2019 net profit after zakat and tax dropped 68 percent YoY to SAR 2.1 billion due to a decline in average selling prices and profit share from associates and joint ventures. The board has, however, recommended a 22 percent cash dividend for the first half of 2019, amounting to SAR 6.6 billion.
“The net profit for Q2 has come in much below expectations and is the lowest quarterly profit on record,” Muhammad Faisal Potrik, head of research at Riyad Capital, told Argaam.
“Slowdown in demand and lower petrochemical prices negatively impacted SABIC,” he added.
Last week, SABIC and Clariant AG reached a common understanding to temporarily defer talks on merging the former’s specialties business with the Swiss Group, citing “unfavorable” market conditions.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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