UPDATE 1-SABIC sees constructive Q1 even though cautious around COVID-19

George T. Taft

(Adds particulars, qualifications)

LONDON/DUBAI, Jan 31 (Reuters) – Saudi Standard Industries Corp , the world’s fourth-major petrochemicals organization, expects enterprise overall performance to be beneficial in the initial quarter of 2021 after an uptick in chemical rates but continues to be careful presented COVID-19 uncertainty, its CEO explained on Sunday.

Saudi Aramco’s acquisition of a 70% stake in SABIC will have a fiscal reward really worth $3 billion to $4 billion, Yousef al-Benyan explained to reporters on a virtual news convention.

“There is an improvement of cooperation amongst SABIC and Aramco. As stated, God inclined, the benefits amongst the two companies is expected in the variety of $3-4 billion. SABIC’s share of that is from $1.5-1.8 billion,” the chief executive claimed.

SABIC posted a net earnings of 2.22 billion riyals ($592 million) in the fourth quarter, reversing a internet decline of 890 million riyals a calendar year earlier as the impairment rates it took on particular cash belongings were reversed.

“Our outlook is that Q1 is heading to be extra or considerably less equivalent to Q4 supplied the enhancement we have professional. We have seen an regular 13% enhancement in chemical costs,” Benyan mentioned, incorporating, however, that selling prices continue being lower than 2019 degrees.

“We are really, basically, optimistically careful in conditions of the place we are transferring. Having said that, I believe the implications of COVID-19 (are) unfamiliar to any individual.”

Benyan claimed that any limitations on travel or financial functions in key marketplaces like Europe, the United States or China could lead to stress on need and subsequently have implications for the chemical compounds sector.

SABIC explained previously in a bourse filing that the non-recurring gains in the fourth quarter ended up 450 million riyals, primarily owing to the changes to sure impairment provisions.

The enterprise also noticed higher profits volume and decrease ordinary expense of gross sales throughout the quarter.

$1 = 3.7508 riyals Reporting by Saeed Azhar and Yousef Saba in Dubai and Marwa Rashad in London Modifying by Sam Holmes and Andrew Cawthorne

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