By optimising its business portfolio, driving cost efficiencies, and maintaining a steadfast commitment to innovation and safety, SABIC has positioned itself to navigate ongoing market challenges and pursue sustained growth in the years to come

Sabic, a leading chemicals company and 70 per cent owned by Saudi Aramco, has recently gone through a period of change, facing both planned strategic adjustments and ongoing market challenges.

Looking back at 2024 and the first few months of 2025, the company has actively worked to improve its business portfolio, streamline operations, and push for steady growth.

This has been necessary due to shifting market conditions, like an oversupply in the petrochemical sector and wider economic uncertainties.

Despite these hurdles, SABIC has stuck to its commitment to developing new ideas, focusing on sustainability, and building long-term value, keeping its strong position in the global chemical industry.

FINANCIAL PERFORMANCE & STRATEGIC DIRECTION

SABIC's financial trajectory over the past year reflects a concerted effort to adapt to and overcome a challenging market environment.

For the full year 2024, SABIC reported a net profit of SR1.5 billion ($400 million), a significant turnaround from a net loss of SR2.8 billion recorded in 2023.

This return to profitability underscores the effectiveness of the company's carefully planned strategies and robust operational framework.

Revenue for 2024 reached SR140.0 billion ($37.3 billion), with an EBITDA of SR19.5 billion ($5.2 billion).

The company's resilience was further demonstrated by a stable EBITDA margin, despite the broader petrochemical industry facing persistent headwinds.

A substantial portion of this financial improvement can be attributed to the ongoing synergies realised through its association with Saudi Aramco, which accumulated to SR9.66 billion ($2.57 billion) since June 2020, with SR3.04 billion ($0.81 billion) specifically captured in 2024 alone.

These synergies have been instrumental in driving cost efficiencies and strengthening SABIC's competitive position.

The strategic divestment of non-core assets also played a crucial role in optimising SABIC’s portfolio and enhancing capital allocation.

This included the sale of Hadeed, SABIC's metal business, its Functional Forms business (specialising in plastic films and sheets), and its stake in Aluminium Bahrain (Alba).

These divestments were part of a broader transformation programme launched in 2024, aimed at improving capital efficiency and fostering long-term value creation.

Looking ahead, SABIC has allocated between $3.5 billion and $4 billion for capital expenditure in 2025, signalling continued investment in strategic growth projects, including the Fujian Petrochemical Complex in China and the Methyl Tertiary Butyl Ether (MTBE) project in Saudi Arabia.

OPERATIONAL EXCELLENCE & INNOVATION

Beyond financial metrics, SABIC's operational performance and commitment to innovation remained key pillars of its success throughout the past year.

The company recorded its best-ever Total Recordable Injury and Illness Rate (TRIIR) of 0.09 in 2024, an 18 per cent improvement over the previous year, highlighting its unwavering dedication to Environment, Health, Safety, and Security (EHSS) excellence.

This focus on safety and operational integrity extended into Q1 2025, where the company saw a 17 per cent improvement in its safety, health, and environment rate (SHER) compared to the same period last year.

Innovation continued to be a cornerstone of SABIC's strategy, with 135 new products introduced in 2024, signifying a robust commitment to meeting evolving customer needs across diverse industrial sectors.

The company’s innovative prowess was further acknowledged through numerous global awards, including five Edison Awards in 2024 and six in 2025, alongside two R&D 100 awards and the EcoVadis Award.

These accolades underscore SABIC's ability to develop cutting-edge solutions that drive progress and address complex global challenges.

The company also maintained its position as the second most valuable brand in the chemical industry for the fifth consecutive year, with an estimated brand value of $4.9 billion.

However, the start of 2025 presented a mixed financial picture. In Q1 2025, SABIC reported a net loss of SR1.2 billion ($0.32 billion), although this represented a 36 per cent improvement from the SR1.9 billion loss in Q4 2024.

Abdulrahman Al-Fageeh, SABIC CEO, attributed the loss to the one-time costs related to business restructuring, which, he stressed, "will reflect positively on the company's long-term financial results and contribute to controlling its expenses".

Despite the net loss, revenue in Q1 2025 remained stable at SR34.59 billion ($9.23 billion) quarter-over-quarter and showed a 6 per cent increase year-over-year.

Production volumes in chemicals and polymers saw a slight increase, contributing to stable sales performance, despite marginal overall decreases in agri-nutrients and polymers sales volumes.

The EBITDA for Q1 2025 stood at SR2.5 billion ($0.67 billion), impacted by these restructuring costs, but an adjusted EBITDA (excluding special items) of SR3.7 billion reflected a 7 per cent increase from Q4 2024, with an EBITDA margin of 11 per cent.

Overall, SABIC's performance over the past year demonstrates a determined focus on strategic adaptation and operational excellence.

By optimising its business portfolio, driving cost efficiencies through integration with Saudi Aramco, and maintaining a steadfast commitment to innovation and safety, SABIC has positioned itself to navigate ongoing market challenges and pursue sustained growth in the years to come.

By Abdulaziz Khattak