Sabic shareholders approve $1.2bn dividend for second half of 2020
Despite challenges last year, key performance indicators of Sabic underlined the strength of its business model, chief executive says
Sabic shareholders approved a dividend of 4.5 billion Saudi riyals ($1.2bn) for the second half of 2020, taking the payout for the entire year to 9 billion riyals.
The second-half cash dividend of 1.5 riyals a share represents 15 per cent of the nominal share value of Sabic and will be distributed to eligible shareholders on May 3, the company said yesterday.
The company’s board recommended a similar dividend for the first half of last year, despite economic headwinds sparked by Covid-19.
Sabic, the Middle East's biggest petrochemicals producer, reported reported a profit of 70 million riyals last year, down 98.65 per cent from the previous year as a result of lower average selling prices in most products.
Impairment provisions in certain capital and financial assets also affected the company’s net income.
Although profit fell sharply from 5.2bn riyals in 2019, it beat estimates by analysts polled by Bloomberg who forecast a full-year loss of about 300m riyals due to the pandemic.
Net profit for the fourth quarter largely softened the pandemic's blow after it surged by 104 per cent to 2.22bn riyals, the company said in a regulatory filing in January.
“We have not only learnt to adapt to the new normal but have also positioned our business for continued success as the global economy recovers and returns to growth this year,” said Sabic's vice chairman and chief executive Yousef Al Benyan.
“Our resilience is defined by our sound business model, operational efficiency and effective customer engagement.”
Despite unprecedented challenges and global disruption last year, Sabic's key performance underlines the strength of the company’s fundamentals and its growth strategy, he said.
“Sabic recorded an improved performance in sales volumes, with 117bn riyals in sales, while demonstrating to customers around the world that they could rely on [it] even in the hardest of times.”
The company was among the first to realise the need for global businesses to reassess their operations and respond to the challenges posed by the pandemic, he said.
It pushed for digitisation and has begun to work on its integration with Saudi Aramco, said Mr Al Benyan.
“This will position us for long-term growth and take us to new heights by bringing additional scale, technology and investment potential opportunities,” he said.
“By 2025, Sabic’s share of the expected annual value creation with Aramco will amount to between $1.5bn and $1.8bn.”
Saudi Aramco bought a 70 per cent stake in Sabic from the Public Investment Fund in June last year for $69.1bn.
Last week, Saudi Investment Recycling Company, a subsidiary of the kingdom’s Public Investment Fund, signed an agreement with Sabic to set up a venture to use recycled plastic feedstock.
The agreement between the two companies also includes a feasibility study on the construction of a chemicals recycling plant in Saudi Arabia to convert mixed plastic waste into pyrolysis oil.
The deal reinforces Saudi Arabia’s commitment to become a circular carbon economy, "ensuring a sustainable future focusing on environment, energy and climate", said Mr Al Benyan at the time.
Updated: April 15, 2021 01:55 AM