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Saudi Arabia’s 14 exchange-listed petrochemicals producers have almost all reported declines in profits in 2015, citing lower prices for their products, whose pricing formulas link them to crude oil. Total profit for the companies was SR21.25bn ($5.67bn), which was 37.9% lower than the SR34.25bn for 2014.
The total value of the 14 companies, measured in terms of market capitalization, fell by 20.5% between end-2014 and end-2015. The decline follows the slide in crude oil prices since mid-2014. Global benchmark crudes are currently trading at around 75% below their mid-2014 levels and the crude outlook is bearish (see p24).
Global petrochemicals player Sabic, which is the most diverse of the companies and has operations outside the petchems sector, saw its net profits fall by 19.6% on the year. The company attributed the decline to lower average sales prices.
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