Shares of Saudi Basic Industries Corporation, the world’s biggest petrochemicals group by market value, fell the most in seven months after its quarterly profit missed analyst estimates.
The company also known as Sabic reported a fourth-quarter profit of 6.16 billion Saudi riyals (Dh6.03bn), a 5.7 per cent increase from last year’s figure of 5.83bn riyals. A consensus of analyst estimates, however, had forecast the company to post a net income of 6.66bn riyals in the period ended December 31.
“Their margins were much lower, which means they were impacted by lower earnings,” said Iyad Ghulam, a research analyst at NCB Capital in Riyadh.
Sabic’s shares fell as much as 3.5 per cent yesterday during trading on the Tadawul exchange.
Sabic has been hit by lacklustre demand for petrochemicals as Europe’s economy grapples to overcome a financial crisis. Revenues at Sabic, which is cutting jobs and closing some plants in Europe, stood unchanged at 189bn riyals last year.
“We expect 2014 results to improve as there are forecasts of solid improvements in prices,” Bloomberg quoted the chief executive Mohammed Al Mady as saying in Riyadh yesterday. The company plans to expand its geographic footprint to markets in North America and China.
“We have a desire to invest in North America, as we like to participate in markets that present a challenge to us,” Mr Al Mady said. “We certainly want to invest in China as well since it has the biggest market globally.”