High crude oil prices boost SABIC's Q2 earnings

Saudi Basic Industries Corp., the petrochemicals company majority owned by Saudi Aramco, saw higher revenues across its petrochemical streams in the second quarter supported by higher crude oil prices, the company said Aug. 9.

Revenue for the three-month period ended June jumped 6.3% year on year to $14.98 billion.

Revenue for the company's petrochemicals and specialties stream rose 4% quarter on quarter to $12.32 billion helped by higher sales prices.

Average sales gained 4% quarter on quarter in Q2.

The petrochemical and specialties segment saw average sales price rise 22% with volumes gaining 9% during the first half of the year.

SABIC's chemicals segment saw decreasing prices for monoethylene glycol due to a slowdown in fiber consumption because of a slump in Chinese textiles demand in the wake of COVID-19 lockdowns. Methanol prices fell quarter on quarter in Q2 due to increased supply.

The company's methyl tertiary butyl ether prices rose to their highest levels in nine years due to higher crude oil and gasoline prices.

Polyethylene prices for the US and Europe also rose quarter on quarter driven by higher feedstock costs, while remaining stable across other regions. China saw weakening demand amid COVID-19 restrictions.

Polypropylene prices also rose in Q2 on higher feedstock costs. Polycarbonate prices remained stable in the US and Europe but fell in Asia due to softening demand from COVID-19 curbs.

SABIC's agrinutrients business saw revenue rise 41% quarter on quarter to $1.52 billion due to increasing sales during the three-month period ended June.

Average sales prices more than doubled 109% and volumes rose 16% compared with the first half of 2021.

The revenue in SABIC's iron and steel business, Hadeed, however, fell 6% to $1.09 billion due to lower sales volume.

"Average sales prices increased by 14% and sales volumes increased by 15% compared with the first six months of 2021," the company said in a statement.

SABIC's Q2 net income rose 3.8% year on year to $2.11 billion. Higher selling prices and sales volume helped boost the company's net profit, which was offset by increased feedstock costs and selling and distribution expenses.