The Saudi petrochemical group Sabic suffered from a low demand for chemicals last quarter. The group warned in January that demand will be weak all year. Since then, the situation only got worse because of lockdowns to bring the coronavirus under control. As a result, Sabic recorded a loss.
The Saudi group, which has its European headquarters in the Netherlands, sells many chemicals that follow the price movements of oil. The oil price collapsed last quarter after a quarrel between oil producers Saudi Arabia and Russia ran high. Sabic also experienced oversupply in other products, which put pressure on profit margins. According to Sabic, this situation still persists. The loss in the first quarter amounted to 950 million riyal, or EUR 232 million. In the same quarter a year earlier, the final result was 3.4 billion riyals.
Sabic is going to cut its expectations considerably in response to the corona crisis. The company halts all investments except necessary expenditures needed to run factories. Sabic also promises to keep his balance strong.