Profits leap at Saudi petrochemicals giant in midst of state takeover

One of the world’s largest producers of petrochemicals has reported a better-than-expected surge in second-quarter profit amid a sales boom in both prices and volumes.

Saudi Basic Industries Corporation (Sabic) posted net income of $1.79bn (£1.37bn) in the three months up to the end of June, rising 81 per cent from $990m in the same period one year before.

The results were higher than economic forecasts of $1.55bn.

In a filling to the Saudi stock exchange earlier today, the firm also revealed that year-on-year sales had jumped 26 per cent.

Sabic, which is the largest petrochemicals producer in the Middle East, added that a recent "strategic restructuring initiative" had led to reduced costs worth nearly $300m.

Profits from Sabic's products such as plastics and metals, which are used extensively in construction, agriculture, industry and the manufacturing of consumer goods, relies heavily on wider global economic growth.

Such results come as speculation ramps up over whether state-controlled oil giant Saudi Aramco is set to acquire a stake in Sabic.

The petrochemical manufacturer's current majority shareholder, Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF), is in talks with the national energy company over selling off its 70 per cent stake.

Such a deal would help fulfil Aramco’s ambitions of playing a larger role in the global petrochemicals market, leaving the company less vulnerable to a reliance on volatile oil prices.

However, the potential buyout of Sabic will likely accentuate current delays in Riyadh’s planned listing of Aramco, which is expected to break world records for an initial public offering.

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