Saudi Basic Industries, the world’s largest petrochemical company, reported worse than expected first quarter results on Tuesday which it attributed to tumbling prices for its products worldwide and to the write-down of goodwill on a 2007 purchase.
The company, the largest listed on the Saudi stock exchange, said that it had lost SAR974m ($259.3m) in the first quarter compared to a profit of SAR6.92bn in the same period last year. The loss was bigger than analysts’ expectations.
Mohammed bin Hamad al-Mady, Sabic’s CEO, said that end-users were having difficulty in obtaining financing and that global slowdowns in the automobile, electronics and building sectors had affected demand for petrochemicals generally and for plastics in particular.
Sabic stock lost 9.9 per cent on the Riyadh stock exchange and weighed heavily on the market’s performance. The benchmark Tasi index lost just over 3 per cent on Tuesday.
Sabic, which is 70 per cent owned by the Saudi Arabian government, also attributed its loss to a SAR1.2bn goodwill depreciation on its $11.6bn purchase of General Electric’s plastic unit in 2007.
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