The headquarters of Saudi Basic Industries Corporation (SABIC)
Riyadh - Arab Today
Saudi petrochemicals giant SABIC on Sunday posted a 39 percent decline in net profits in the first quarter of 2015 compared with a year ago before global oil prices plunged.
SABIC, the largest publicly traded firm in the Gulf, reported net profit of 3.93 billion riyals ($1.05 billion) for the three months ending March 31.
That compared with a net profit of 6.44 billion riyals in the same quarter a year earlier.
The drop in oil prices from above $100 per barrel over the past year to around $56 for US benchmark crude on Friday "has affected greatly the petrochemical price," SABIC's acting vice-chairman and CEO, Yousef al-Benyan, told reporters.
"The petrochemical companies will go through some pressure with regard to profitability. This is because of the drop in oil prices," he said.
"The petrochemical industry is married and linked to oil prices," Benyan said.
In a statement, SABIC said that although costs had fallen, lower average sale prices were also down, with a resultant fall in net income.
Benyan added that the industry was cyclical and the long-term outlook good for the company, which has a global presence.
"We are optimistic," Benyan said.
SABIC is one of the world's largest petrochemical manufacturers, producing chemicals, fertilisers, plastics and metals.
Global crude prices have tumbled on worries over global oversupply and weak demand growth.
Saudi Arabia is the world's largest oil exporter.