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Saudi petrochemical producers are benefitting from rising crude oil prices. The 14 petchems firms listed on the Saudi Stock Exchange (Tadawul) saw their combined net profits amount to SR8.50bn ($2.27bn) in 1Q 2018, up 17.9% from 1Q17.
Yet the profits hike fell short of the corresponding rise in benchmark crude oil prices, to which most petrochemicals prices are indexed. 1Q 2018’s average Arab Light price of $65.3/B was up 25% year-on-year. And combined net income fell short of the bumper returns in 3Q 2017, which neared $9bn for the first time since crude prices plunged in late 2014 (see chart).
State-led Sabic, the biggest Saudi petchems firm by far, attributed its Q1 income boost to higher average selling prices and sales volumes. But it noted that the boost came “despite the strategic restructuring” undertaken to increase productivity and reduce operating costs. The company plans both big joint ventures and major acquisitions.
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