(Bloomberg) -- Saudi Basic Industries Corp., the world's biggest chemicals maker by market value, said profit would probably fall this year as the global supply-chain squeeze pushes up costs.
The Riyadh-based company, known as Sabic, made net income of $1.3 billion in the fourth quarter, down 12% from the previous three-month period and below analysts' estimates.
“We expect earnings in 2022 to be healthy, albeit lower than the exceptionally strong earnings in 2021 due to the impact of new capacity coming onstream, higher feedstock costs and continued supply-chain constraints,” Sabic said in a statement on Thursday.
Chemical prices soared in the past year as major economies recovered from the coronavirus pandemic. Sabic made its highest earnings in almost a decade in the second quarter. But delays and disruptions across ports and other logistic sites have pushed up the price of energy and other key inputs for the company.
Sabic said profit should be helped in 2022 by its parent, oil giant Saudi Aramco, transferring sales and marketing rights of chemicals and polymers products to it.
Sabic's stock has risen 6.4% this year, slightly under-performing competitors such as BASF SE and Dow Inc.
Saudi Arabia wants firms like Sabic, valued at $99 billion, to form the basis of new manufacturing and consumer-goods industries as the kingdom diversifies from oil.
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