SABIC Posts Q1 Net Loss of SAR 1.21 Billion on Higher Operating and Feedstock Costs

Riyadh, May 5, 2025 (Saudi Arabia Breaking News) – Saudi Basic Industries Corporation (SABIC), one of the world’s largest chemical producers, reported a first-quarter net loss of 1.21 billion Saudi riyals ($323 million) on Sunday, citing elevated operating expenses and rising feedstock costs. This marks a sharp reversal from the 250 million riyals profit posted during the same period last year.

The company attributed the loss to ongoing global economic headwinds, oversupply in petrochemical production, and a non-recurring cost related to a major restructuring effort. In a press conference, CEO Abdulrahman Al-Fageeh acknowledged the industry-wide challenges and cited a "slowdown in global GDP" as a key contributing factor.

“The oversupply in production capacity of petrochemicals still causes a challenge,” Al-Fageeh said. “Restructuring is ongoing, but this last one was on a bigger scale for a bigger impact. We expect to complete it this year.”

SABIC stated that 1.7 billion riyals ($453.2 million) of its operating expenses were linked to the restructuring initiative, which is part of the company’s broader efforts to cut costs and reposition itself for future growth.

Additionally, the company reported a 1.05 billion riyals drop in gross profit, primarily driven by higher feedstock prices, further pressuring margins in an already strained global chemicals market.

Despite the net loss, SABIC’s first-quarter sales rose 5.8% to 34.59 billion riyals, up from 32.69 billion riyals in Q1 2024.

In February, SABIC announced plans to pursue new investment opportunities while implementing cost-cutting measures, following a disappointing fourth-quarter performance.

The chemicals sector globally continues to face sluggish demand and elevated input costs, prompting major producers like SABIC to reevaluate their cost structures and market strategies.