SABIC shares lose value following fall in annual profit
Saudi Arabia’s petrochemical giant, SABIC, has seen its shares falling after the company reported a drop in its annual profit.
On Monday, SABIC’s shares were traded almost five percent lower after the company released a report revealing a reduction of 19.57 percent in its full-year net profit, AFP reported.
Saudi Basic Industries Corp, SABIC, which is the largest publicly traded company in the Persian Gulf Arab states, had already released a report on Sunday on its 2015 results and earnings for the year’s fourth quarter after markets closed.
On the same day, share prices took a nosedive throughout the energy-rich Persian Gulf states due to a sharp fall in oil prices.
As a result, the Saudi Tadawul All-Shares Index closed down 5.44 percent to hit a five-year low before losses eased slightly on Monday.
SABIC reported a net annual profit of 18.78 billion riyals (USD 5.01 billion) for 2015, as compared to 23.35 billion riyals for the preceding year.
In a statement to Tadawul, the Saudi company blamed a fall in average sales prices and a sharp decline in the metals sector for falling price of its shares.
SABIC also cited the same factor to justify a 29.36 percent fall in its fourth-quarter net profit to 3.08 billion riyals compared with 4.36 billion riyals for the same period a year earlier.
SABIC is one of the largest global manufacturers of petrochemicals, fertilizers, plastics and metals, which in addition to petrochemicals also operates wholly-owned Saudi Iron and Steel, whose products are sold in domestic markets.
To the detriment of the company, prices of both industrial metals and crude oil fell last year.
SABIC had previously said that petrochemical prices were affected by the drop in global crude prices from above USD 100 a barrel in early 2014.
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