Sabic becomes profitable despite 11% drop in revenue

Saudi Basic Industries Corp (Sabic), which is 70 percent owned by Saudi Aramco, turned profitable in the first quarter of 2026 following a drop in operating expenses.

Net income attributable to shareholders reached SAR13.2 million ($3.5 million), versus a net loss of SAR1.1 billion in the same period last year, the company said in a statement to the Saudi stock exchange on Wednesday.

Operating expenses fell by SAR1 billion, as there were no non-recurring costs from the restructuring initiative launched in the first quarter of 2025. 

In addition, general and administrative, as well as research and development costs, fell by SAR384 million.

Revenue declined by 11 percent year on year to SAR26.2 billion, primarily due to lower sales volume, partially offset by higher average selling prices across key products.

The company maintains its capital expenditure guidance between $3.5 and $4 billion for 2026.

Sabic shares closed 0.6 percent lower at SAR60.85 on Tuesday, up 19 percent so far this year.

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Analysts told AGBI this month the petrochemicals sector is likely to see profits increase this year despite disruptions caused by the war.

The effective closure of the Strait of Hormuz has severely limited petrochemical exports from the Gulf as well as the raw materials needed to make them, putting pressure not just on regional producers but on chemical companies across the world.

Should the strait reopen, analysts believe Saudi producers are best placed to get their products to market with healthy profit margins while rival companies struggle to access raw materials.

The petrochemical industry is vital to Saudi Arabia’s diversification goals. In 2024, it accounted for SAR149 billion, more than a third of the country’s non-oil exports, according to the Saudi Press Agency.