SABIC sees 2-5% jump in 2021 sales after 4Q demand recovery

Dubai — Saudi Basic Industries Corp., the Middle East's biggest petrochemicals producer that is controlled by Saudi Aramco, said Jan. 31 it expects 2021 sales will rise 2-5% on the year, after an uptick in products demand in Q4.

"Product prices rose during the fourth quarter of 2020 driven by healthy demand and a tightness in the supply/demand balance for some of our key products, which resulted from outages and rising oil prices," the company said. In Japan alone, propane and butane prices in Q4 soared more than 30% from Q3, it noted.

The increase in SABIC's revenue to SAR 32.85 billion ($8.76 billion) was also attributed to stronger oil prices and economic recovery. The cost of sales came to SAR 24.73 billion, 9% higher than Q3 2020 mainly due to an increase in feedstock prices, SABIC said.

For the full year, the petrochemical giant's revenue fell 14% from 2019.

In March 2020, Saudi Aramco, the world's largest exporter of crude oil, received approval from the European Commission to acquire 70% of SABIC, for $69 billion. At a strategic level, SABIC is now the chemicals arm of Saudi Aramco

Petrochemicals account for the bulk of SABIC's business. It also produces metals and agri-nutrients and has facilities in the Americas, Europe, Asia and Africa.

"The fourth quarter benefited from sustained economic recovery, which translated into a healthier demand for our products. Our global business model and the strength of our global supply chain continue to demonstrate their resilience and flexibility, positioning us well for long-term growth," Yousef Abdullah Al-Benyan, SABIC's vice chairman and CEO, said.

In the results statement, the company said it expects economic activity to continue improving and estimates a global GDP growth rate of between 4.5% and 5% in 2021. This scenario assumes the effective and widespread use of the COVID vaccine around the world.