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(Bloomberg) — Saudi chemicals giant Sabic suffered a surprise loss in earnings for a second straight quarter, adding to signs the company is struggling to cope with market uncertainty and broad industry headwinds.
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Saudi Basic Industries Corp. posted a net loss of 1.2 billion riyals ($320 million), according to a statement on Sunday. That compares with analysts’ estimates for a profit of 699 million riyals. The results reflect challenges including elevated feedstock prices and lower overall sales volumes, particularly in agri-nutrients and polymers.
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Results were also affected by higher operating expenses, mainly due to a strategic restructuring initiative, Sabic said in the statement.
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Chemical giants globally are working to regain financial stability as they battle sluggish demand, high costs and compressed margins. LyondellBasell Industries recently missed on earnings, while Dow Inc. said it’s delaying construction at a project in Canada until conditions improve. BASF SE is said to be weighing the sale of its coatings units as it overhauls its business to contend with market pressure.
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Earlier this year, Sabic had warned of further market challenges on the back of rising supply and geopolitical uncertainty. Weakness in China, one of the world’s top chemicals consumers, has been a specific point of pressure. President Donald Trump’s trade war is also fanning concerns over global economic growth and the strength of demand.
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Sabic’s margins may remain under pressure in 2025, due in part to sustained weakness in consumption, according to Salih Yilmaz, senior analyst at Bloomberg Intelligence. Still, supply-demand fundamentals should gradually become more favorable as central banks ease monetary policy, he said.
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Sabic’s shares are down about 8.5% this year on the Saudi stock exchange, compared with a 4% decline for the broader index.
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Saudi Aramco, the world’s biggest oil exporter, owns a majority of Sabic and is due to report earnings on May 11.
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