The company’s revenue for Q2 reached SR35.87 billion, representing a decrease of 4 per cent compared to previous quarter

Saudi Basic Industries Corporation (Sabic), the biggest petrochemicals producer in the Middle East, reported a 38 per cent slide in second-quarter net income as lower demand due to a global economic slowdown dented profitability.

Net income for the three-month period ending June 30 dropped to SR2.12 billion ($0.57 billion), Sabic said in a statement.

The company’s revenue for the second quarter reached SR35.87 billion, representing a decrease of 4 per cent compared to previous quarter and a 17 per cent decrease year-on-year. Net income during the second quarter amounted to SR2.12 billion, a decrease of 38 per cent compared to the first quarter of the year.

"The slowdown in global GDP growth coincides with a decline in petrochemical prices due to a significant increase in new supply capacity resulting in lower product prices and margins in key product lines," said Yousef Al-Benyan, Sabic Vice Chairman and Chief Executive Officer.

"Though lower petrochemical prices have negatively impacted Sabic’s second quarter results, our operational performance remains robust. Sabic remains optimistic on industry fundamentals over the long term and we continue to invest for growth. We recently received all the regulatory approvals to increase our stake in Ar-Razi, the world’s largest methanol complex, to 75 per cent and renewed our partnerships with Japan Saudi Arabia Methanol Company (JSMC) for a further 20 years. Also, we obtained all approvals to establish a petrochemical joint venture project with ExxonMobil in the US Gulf Coast."

In the reporting period, Sabic also signed a Memorandum of Understanding (MoU) to scope a new solar PV-based power plant in Yanbu Industrial city that could have a potential capacity between 200 to 400 Mega Watt (peak). This project would be the kingdom’s first large scale renewable energy project.