Sabic (Riyadh / Saudi Arabia; www.sabic.com) plans to liquidate three of its plastics-related subsidiaries and integrate the activities into other group reporting units, the chemicals and plastics giant said in a filing with the Saudi stock exchange Tadawul at the end of 2019. Sabic stressed that it was not quitting the businesses, which are currently part of the stand-alone units Sabic Industrial Catalysts, Saudi Carbon Fiber and Saudi Japanese Acrylonitrile, noting that the liquidation, which it said goes hand-in-hand with a group transformation plan, should not impact earnings.

In the 2019 third quarter, Sabic’s net income slumped by 86% to SAR 830m (about EUR 200m), its lowest quarterly profit in a decade, coupled with a sales decrease of 23%. This added to a 17% profit slump in the second quarter – see Plasteurope.com of 01.08.2019. Pressuring the bottom line in Q3 was a SAR 1.5m impairment charge on the Saudi group’s 24.99% shareholding in Swiss speciality chemicals producer Clariant (Muttenz; www.clariant.com), as well as pressure on plastics selling prices due to falling oil notations.

With global economic growth expected to be lower on average in 2019 compared with 2018, the challenges to earnings seen in the third quarter would likely persist for the rest of the year, CEO Yousef Al-Benyan said in presenting the group’s quarterly financial report in late October. As a consequence, he said management would continue to review the value of all its assets as part of its annual planning.

At the end of March 2019, Sabic agreed to be acquired by compatriot Saudi Aramco (Dhahran; www.saudiaramco.com) – see Plasteurope.com of 29.03.2019 – with Aramco picking up 70% of the shares held by the country’s sovereign wealth fund PIF. In November, Aramco, which late last year finally completed its long-awaited stock flotation on the Tadawul exchange, said it would delay fully paying for the shares by four years until September 2025 under terms of a new agreement.