Saudi Basic Industries Corporation , a global leader in diversified chemicals, has unveiled plans to implement cost-cutting strategies and explore new investment avenues following an unexpected net loss of 1.89 billion riyals in the fourth quarter of 2024. This loss surpasses the 1.73 billion riyals deficit recorded during the same period in 2023 and contrasts sharply with analyst forecasts, which had anticipated a profit exceeding 1 billion riyals.
The chemical industry has been navigating a challenging landscape marked by subdued demand and elevated input costs, factors that have collectively compressed margins. In response to these adversities, SABIC’s Chief Executive Officer, Abdulrahman Al-Fageeh, emphasized the company’s commitment to enhancing operational efficiency and judiciously managing expenditures. “Ethylene demand growth remains slower than capacity growth, leading to sustained pressure on capacity utilization rates,” Al-Fageeh noted, highlighting the broader industry challenges.
Despite the fourth-quarter setback, SABIC reported a net profit of 1.54 billion riyals for the full year of 2024, a significant turnaround from the net loss of 2.77 billion riyals reported in 2023. This positive annual performance is attributed to strategic initiatives aimed at optimizing the company’s portfolio and restructuring underperforming assets. Notably, in September 2024, SABIC announced the sale of its 20.62% stake in Aluminium Bahrain to Saudi Arabian Mining Company for approximately $1 billion. This divestment aligns with SABIC’s strategy to concentrate on its core petrochemical operations and reallocate capital to higher-margin opportunities.
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