Saudi Basic Industries Corporation, the Middle East's biggest petrochemicals company, reported a third consecutive quarterly loss on Sunday, after deciding to shut a cracker production plant in the UK as part of a restructuring drive.
Sabic posted a net loss for the three months to the end of June of 4.07 billion riyals ($1.09 billion), compared with a net profit of 2.18 billion riyals during the same period last year, it said in a filing to the Tadawul stock exchange, where its shares are traded.
The results missed analysts’ expectations of a profit of 504 million riyals, Reuters reported.
Sabic, which is 70 per cent owned by oil major Saudi Aramco, has posted three consecutive losses in quarterly profits as the chemicals industry grapples with weak demand that has affected sales.
The company attributed the latest loss mainly to a 3.78-billion-riyal impairment related to the closure of its cracker plant in Teesside, the UK.
“This action is in line with the company's review of its business portfolio with the aim of reducing costs and improving profitability,” Sabic said.
It also cited impairment charges for its investment in Swiss speciality chemicals maker Clariant due to its share price decline.
Revenue during the latest quarter, however, rose 3 per cent from the previous three-month period, to 35.6 billion riyals due to “increased sales volumes offset by a decrease in average product selling prices”, the company said.
Sabic chief executive
“As a result of excess production capacity, operating rates remain below the historical global average, leading to margin pressure due to oversupply,” said Abdulrahman Al Fageeh, chief executive of Sabic.
“The cost optimisation initiatives we launched in the first quarter … aim to deliver, by 2030, a recurring annual Ebitda impact of $3 billion.”
The company plans to spend between $3 billion and $3.5 billion this year.
The global economy is facing headwinds as US President Donald Trump's push to impose heavy tariffs on trading partners stokes fears. The disruption in global commerce will severely dent economic growth.
In another filing on Sunday, Sabic proposed a dividend of 1.5 riyals per share for the first half of the year. Shares declined 2 per cent to 53.55 riyals each.
Market sentiment remained uncertain during the second quarter of 2025, weighed down by global economic uncertainty and geopolitical tension, Sabic said.
The manufacturing purchasing managers’ index averaged slightly below 50, signalling persistent softness in demand, the company added.
Sabic is playing a key role in Saudi Arabia's plan to reduce its reliance on oil exports.
The company said projects such the Petrokemya MTBE plant in Saudi Arabia and Sabic Fujian complex in China were progressing according to plan.
Last year, Sabic announced investments worth $6.4 billion in the Sabic Fujian petrochemical complex as part of its expansion plans in the world's second-largest economy.
