Saudi Chemical Giant SABIC Misses Profit Estimates Amid Persistent Downturn
Saudi chemical giant SABIC reported a significant profit decline in Q3 2025, with a 56% year-on-year drop and a profit miss compared to estimates. Revenue also fell by nearly 7%. Despite some improvement in EBITDA margin and free cash flow, the sector continues to face pricing challenges and no clear recovery is expected soon due to ongoing global market weakness.
Saudi Basic Industries Corporation (SABIC), Saudi Arabia's largest chemical company, disclosed a third-quarter profit of 440 million riyals in 2025, marking a 56% decrease compared to the same period last year and falling short of analyst expectations of 729.3 million riyals. Revenue declined 6.9% year-on-year to 34.33 billion riyals, underperforming forecasts. Operating profit decreased by 33% to 1.66 billion riyals but still surpassed estimates. Adjusted net income dropped from 1.15 billion to 700 million riyals, and adjusted EBITDA declined slightly to 4.99 billion riyals. However, free cash flow improved from 3.92 to 4.34 billion riyals. Despite a quarterly EBITDA margin increase to approximately 12.5%, the overall sales revenue continues to decline quarter on quarter, and pricing for most chemical products remains stagnant. The sector faces a persistent downward cycle, and experts do not anticipate a near-term global recovery in petrochemicals. SABIC's third-quarter profits reflect impairment charges on previous operations and ongoing challenges in the chemical business, with no substantial earnings recovery visible. Market sentiment is mixed, with analysts divided among buy, hold, and sell recommendations. Parallel reports indicate some other Saudi chemical companies like Saudi Chemical Co. posted higher net profits, but SABIC's results highlight the industry's continuing strain from market and pricing pressures.
