Chemicals behemoth Saudi Basic Industries Corp. reported a 3.8% increase in quarterly earnings, but warned profit margins will remain “under pressure” as costs climb.
Prices of products such as polyethylene and polyvinyl chloride -- used to make everything from plastics to building materials -- have jumped as economies recover from the pandemic, boosting demand. Yet a supply-chain squeeze has pushed up expenses for producers.
Sabic, as the Saudi Arabian company is known, said net income rose to 7.93 billion riyals ($2.1 billion) in the second quarter from 7.64 billion riyals a year earlier. Revenue climbed 32% to 56 billion riyals, beating analysts’ estimates.
The Riyadh-based company, controlled by oil giant Saudi Aramco, said the results reflect higher selling prices and sales volumes, despite rising costs for feedstock and distribution. It gave a cautious outlook for the rest of the year amid fears of a flagging global economy.
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