(Bloomberg) -- Saudi Basic Industries Corp., the world’s biggest chemicals maker by market value, saw profit surge in the second quarter as the economic recovery from the coronavirus pandemic boosted products from plastics to paint.
The Riyadh-based company, controlled by Saudi Aramco, made net income of 7.64 billion riyals ($2 billion), the highest quarterly figure in almost a decade and up around 60% from the first three months of the year. Revenue climbed 72% year-on-year to $11.3 billion.
Chemicals firms are experiencing a steep rise in earnings. Global demand for packaging and for flooring and roofing materials has increased markedly this year amid economic re-openings. The world’s biggest chemical maker by sales, Germany’s BASF SE, recently raised its full-year profit forecasts.
Prices of chemical ingredients like polyethylene and polyvinyl chloride used to make plastics, solvents and other construction materials have climbed to records this year. The industry is also still recovering from a massive supply crunch following February storms in the U.S. that caused supply outages.
Sabic’s said its margins were boosted by “higher product prices and sales volumes, supported by a healthy demand and tight supply conditions for most key products.”
The company, which also makes steel, prices for which have hit record highs, expect margins to moderate but “remain healthy” over the rest of the year.
Sabic’s board in June recommended a cash dividend of 1.75 riyals per share for the first half of 2021, up from 1.50 riyals a year earlier, when the company made a loss. The stock has risen 22% since the end of 2020, outperforming competitors such as BASF and Dow Inc.
Saudi Arabia expects chemical makers like Sabic -- which has market capitalization of $99 billion -- a to form the basis for new manufacturing and consumer-goods industries as it seeks to reduce its reliance on oil.
(Updates with more details from the statement.)
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