Yousef Al-Benyan, Vice Chairman and CEO of SABIC
Saudi Basic Industries Corp.’s (SABIC) financial performance witnessed a positive start to 2021, amid rising oil prices and a tight supply and demand balance, said company Vice Chairman and Chief Executive Officer (CEO) Yousef Al-Benyan.
“These elements, combined with growing demand as the global economy continues to recover, resulted in higher prices and margins for most of our products,” he stated.
“The key priorities for SABIC in 2021 are to remain focused on delivering our transformation and strategy, maintaining our financial strength, improving operational performance, meeting our ESG (environmental, social, and governance) commitments, and demonstrating excellence in customer focus and innovation.”
Plant safety and environment, health, safety & security (EHSS) at large is always a priority for SABIC, Al-Benyan added.
In addition, SABIC also remains focused on generating maximum value from synergies with Saudi Aramco. Between the deal close (June 2020) and the end of Q1 2021, SABIC has achieved a synergy value of $156 million.
“Our industry thrives on innovation and collaboration, which enable us to come up with and deliver important contributions to urgent global challenges including resource efficiency and CO2 reduction. This flagship sustainability initiative forms part of SABIC’s long-term vision and climate change strategy to transform our business through the concept of the circular carbon economy,” Al-Benyan affirmed.
SABIC is still also focused on generating maximum value from synergies with Saudi Aramco.
Moreover, the level of margins witnessed in the first quarter is expected to continue during the second quarter of 2021, on the back of healthy oil prices and relatively tight supply and demand balances in our primary products, he added.
Commenting on prices, Al-Benyan explained that an increase in chemicals prices was driven by tightness in the supply and a rise in oil prices.
Meanwhile, polyethylene prices increased in the first quarter, due to a tightness in supply led by planned and unplanned outages, robust demand and an increase in feedstock costs.
Polypropylene (PP) prices also increased in the first quarter, backed by better demand. Moreover, polycarbonate (PC) prices were higher, due to a tighter supply resulting from continued outages in Asia and the US and healthy demand.
Urea prices improved amid robust demand and tight supply. It also witnessed healthy demand from the US, Europe, Latin America and India especially in the latter part of the first quarter.
In most parts of the world, SABIC expects economic activity to continue improving, as witnessed during the first quarter of 2021. The company estimates the global GDP growth rate to increase between 5% and 5.5% in 2021. This depends on the effective and widespread use of COVID vaccines around the world.
SABIC reported a net profit after Zakat and tax of SAR 4.86 billion for the first quarter of 2021, against a net loss of SAR 1.050 billion in the year-ago period.
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