February 26, 2025 [Reuters]- Saudi Arabian chemicals giant SABIC reported worse than expected fourth-quarter results on Wednesday against a sectoral backdrop dominated by margin pressures.

The chemicals industry has been grappling with weak demand and high input costs, leading to lower prices and squeezed margins.

SABIC posted a net loss of 1.89 billion riyals ($504 million) for the three months to December 31, against a loss of 1.73 billion riyals in the corresponding period the previous year.

Analysts had expected a profit of a little more than 1 billion riyals, LSEG data shows.

“Fixed costs usually go up in the winter … also in the fourth quarter, especially the final month, there is a decrease in quantities sold,” Salah Al-Hareky, executive vice president for corporate finance, told reporters.

SABIC, 70% owned by oil major Saudi Aramco, swung to a 2024 net profit of 1.54 billion riyals from a net loss of 2.77 billion riyals in 2023.

Chief Executive Abdulrahman Al-Fageeh said monetary easing was helping to support the petrochemicals industry but “overcapacity continues to be a challenge, especially for polymers”.

“Ethylene demand growth remains slower than capacity growth, leading to sustained pressure on capacity utilisation rates. Despite these market conditions, SABIC maintained a stable EBITDA margin, demonstrating its resilience amid difficult market conditions,” he said in the company’s earnings release.

SABIC projected capital investment of between $3.5 billion and $4 billion this year, against guidance of $4 billion to $5 billion for 2024.