Saudi Basic Industries Corporation (SABIC) has reported a 7% year-on-year decline in revenue for the third quarter of 2025, with total revenue amounting to SAR34.33 billion, primarily due to lower average selling prices and sales volumes.

Net income for the quarter stood at SAR435 million, compared with SAR1 billion in the same period last year. The company attributed the decrease mainly to lower gross profit, reduced other operating income, and higher zakat and tax expenses.

Gross profit dropped by SAR894 million, largely due to compressed contribution margins, while other operating income fell by SAR252 million, reflecting the absence of one-off gains recorded in Q3 2024 from the divestment of the Functional Forms business and favourable currency movements. Zakat and tax expenses were higher by SAR300 million, mainly due to adjustments in accruals.

These factors were partially offset by cost savings of SAR489 million in selling, general, administrative (SG&A) and research and development (R&D) expenses, driven by SABIC’s ongoing transformation programme. Net financial results improved by SAR264 million on the back of fair valuation of derivative equity instruments, while income from associates and joint ventures rose by SAR142 million following improved profitability in those investments.

Quarter-on-quarter, SABIC’s revenue declined 3% from Q2 2025, again attributed to the absence of licensing and engineering revenues recognised in the previous quarter. However, net income showed a significant recovery from a net loss of SAR4.07 billion in Q2 2025, driven by the absence of impairment charges and provisions amounting to SAR3.78 billion recorded earlier in the year following the closure of SABIC’s Teesside cracker in the UK.

Improved performance from associates and joint ventures also contributed to higher profits, alongside lower SG&A and R&D costs by SAR198 million. The gains were partially offset by higher zakat and tax expenses of SAR304 million.

Nine-month results

For the first nine months of 2025, SABIC’s revenue stood at SAR104.49 billion, down 1% compared with the same period last year. The company reported a net loss of SAR4.84 billion, compared with a net profit of SAR3.43 billion in the corresponding period of 2024.

The loss was mainly attributed to impairment charges and provisions related to the Teesside closure (SAR3.78 billion), a strategic restructuring cost of SAR1.07 billion recorded in Q1 2025, and lower results from associates and joint ventures due to European asset impairments (SAR 925 million). Zakat and tax expenses rose sharply by SAR1.41 billion, reflecting the impact of non-cash benefits recorded in 2024, while finance costs increased by SAR485 million as a result of fair valuation adjustments.

These negative impacts were partially offset by cost efficiencies of SAR426 million in SG&A and R&D expenses, reflecting continued progress under SABIC’s transformation initiatives.

To provide greater transparency, SABIC introduced adjusted financial metrics in Q2 2025, excluding one-off special items. On this basis, the company reported an adjusted EBITDA of SAR4.99 billion in Q3 2025, down 4% from SAR5.22 billion in Q2 2025, maintaining an EBITDA margin of 15%. Adjusted EBIT stood at SAR1.74 billion versus SAR1.94 billion in the prior quarter, while adjusted net income rose to SAR 700 million compared with SAR 480 million in Q2 2025. - TradeArabia News Service