SABIC maintains disciplined capex approach, focus on strategy

Saudi Basic Industries Corp. (SABIC) said it maintains a disciplined approach in managing capital expenditures (capex), expecting spending to range between $4 and $5 billion in 2024.

The company estimated gross domestic product (GDP) growth in 2024 at 2.7%, focusing on improving its strategic portfolio, restructuring underperforming assets, and prioritizing sustainability and innovation.

The company reported achieving SAR 7.8 billion in captured value in cooperation with Saudi Aramco since acquiring 70% of its shares in June 2020, including SAR 607.5 million in Q2 2024.

In the Q2 2024 financial statement, Abdulrahman Al-Fageeh, CEO of SABIC, noted a slight decline in the global economy in Q2 2024, mainly due to unexpected downturns in major economies' economic activity data.

He highlighted that improved PMI data indicated better global economic conditions.

Furthermore, global trade showed signs of recovery, driven by higher exports, inventory restocking and increased financial activities, the CEO said. As inflationary pressures ease, some central banks have begun reducing interest rates, potentially providing additional stimulus to the global economy, Al-Fageeh said.

He stated that Saudi Iron and Steel Co.'s ( Hadeed) ownership officially transferred to the Public Investment Fund (PIF) on June 1, 2024, and this strategic move will help SABIC become the global leader in chemicals.

Al-Fageeh added that in line with SABIC's carbon neutrality commitment by 2050, the company launched a new certified low-carbon product range.

He announced the successful start-up of a new hydrogenation plant in Geleen, Netherlands, which is part of the company’s advanced recycling process. The plant converts pyrolysis oil from post-consumer mixed plastic waste into alternative feedstocks for SABIC’s certified circular polymers under the TRUCIRCLE portfolio.

SABIC's profit rose to SAR 2.4 billion by the end of H1 2024, a 32% increase from SAR 1.8 billion in the same period of 2023, according to Argaam’s data.