SABIC profit forecast to drop 47% in Q1 2025, says Riyad Capital
Yanbu National Petrochemical Company (Yansab) is predicted to report a 94% YoY drop in net profit to SAR 6 million in Q1 2025.
The net earnings of Saudi International Petrochemical Company (Sipchem) are seen to fall by 81% to SAR 34 million in Q1 2025 from SAR 182 million in the same period last year.
SABIC Agri-Nutrients Company will see a net profit rise of 4 percent YoY to SAR 877 million in the first quarter, the report said.
"We maintain our uncertain-to-negative outlook on most products based on increasing Chinese capacity, utilization rates being
lower globally, and additional skepticism driven by the recently announced tariff related trade policies of the United States. However, since the United States is a
net-exporter of Petrochemicals, this latest shakeup in global trade could present an opportunity for Saudi firms; to fill any supply gaps left in its wake," the report said.
Riyad Capital expects an increase of 7% YoY in top-line performance for companies under its coverage. In addition, margins may experience some relief for some producers, but not across the board, driving profitability to decline by 54% YoY.
The brokerage forecasts higher volumes, margins, and net profits for ammonia and urea producers, given the continued disruptions in the supply of urea and seasonal demand pressure supporting dynamics for fertilisers.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
a minute ago
- Arabian Post
Markets can't afford to ignore Bessent's warning shot
US Treasury Secretary Scott Bessent last week made a comment that should have sent markets into deep reflection. Instead, it was largely shrugged off. He suggested that the White House's unprecedented revenue-sharing deal with Nvidia and AMD could be extended to other industries. This single line carries profound implications — and the muted reaction says more about investor complacency than anything else. The arrangement currently in place compels Nvidia and AMD to hand over 15% of certain Chinese sales to Washington in exchange for export licences. Bessent called it a 'model' and a 'beta test.' President Trump reinforced the idea by comparing modified chip exports to the downgraded fighter jets the US sells abroad. If this experiment were to expand to other sectors, it would fundamentally alter how globally active companies interact with the US government. It would rewrite rules of trade, supply chains, and corporate valuations. I said earlier last week that 'overstretched markets are vulnerable to precisely this kind of policy surprise.' We are in a moment where investors are pricing perfection — and a policy template that could be rolled out across industries is anything but perfect. It is disruptive, unpredictable, and open-ended. That should not be ignored. The danger is that investors are fixated on a single theme: the Federal Reserve cutting rates in September. Soft inflation data has all but convinced markets a cut is coming, with futures pricing a 94% probability. Some are even betting on a 50-basis-point move after Bessent himself called on the Fed to be bold. The S&P 500, Nasdaq, Dow, Russell 2000, and MSCI All Country World Index all hit fresh highs on this expectation. In other words, global positioning has become dangerously one-sided. But markets built entirely around one assumption are fragile. Add a new industrial policy template into the mix, one that Washington could apply beyond semiconductors, and the spectrum of possible outcomes broadens dramatically. What makes the situation even riskier is that the rally is already thin. In a healthy, broad-based uptrend, earnings strength is visible across sectors. Today, it's selective. This leaves indices looking strong on the surface while being hollow underneath. When strength is concentrated and liquidity is light, as it often is in August, markets can turn violently. A handful of good sessions convinces traders a durable uptrend has formed, only for sentiment to collapse when the data flow turns against them. This is a textbook environment for sharp reversals. For investors, the critical point is this: Bessent's remarks are not idle speculation. They hint at a framework that could extend beyond chips. If that happens, global business will have to operate under a new set of rules overnight. Revenues, margins, and capital expenditure plans would all need to be reassessed. Cross-border investment flows would feel the impact immediately. The knock-on effects would not stay confined to semiconductors. I don't believe the market is prepared for that possibility. At record highs, optimism is being priced without much thought for what could go wrong. And it is precisely at these moments — when the headlines are euphoric, when positioning is crowded, and when liquidity is thin — that disruptive variables carry the most risk. This is not a call to panic. It's a call to pay attention. Record highs don't reduce risk; if anything, they amplify it. Investors should be reassessing exposure, rebalancing portfolios, and considering what happens if policy, data, or geopolitics break from the script everyone has chosen to believe. Chasing the last leg of this rally on the assumption that nothing can go wrong is the most dangerous move of all. Bessent has effectively fired a warning shot. Whether markets want to hear it or not, investors should be listening.
Arabian Post
a minute ago
- Arabian Post
White House Joins TikTok Amid Ongoing Controversy
The White House has launched an official account on TikTok, sparking fresh debate over the platform's role in US politics and its uncertain future in the country. This unexpected move comes as the Biden administration continues to scrutinise TikTok's operations within the United States, with concerns primarily centred around data privacy and national security. The account, created under the handle @whitehouse, aims to reach a younger audience and engage with the public in a more direct and informal manner. Despite the ongoing tensions surrounding TikTok, this step marks a significant shift in the government's approach to social media communication. Officials have indicated that the account will be used for sharing updates, promoting policy initiatives, and communicating directly with American citizens. This move also highlights the growing importance of social media platforms, particularly TikTok, in shaping public discourse. With over a billion active users worldwide, TikTok has become a cultural force that cannot be easily ignored, even by governmental institutions. The platform's ability to influence trends, politics, and public opinion has made it an indispensable tool for reaching younger demographics, which tend to engage with it far more than traditional media channels. ADVERTISEMENT The decision to embrace TikTok comes at a time when the app is facing increasing scrutiny from US lawmakers. Republican leaders, in particular, have expressed concerns about the platform's ties to China and its potential for influencing American users. These concerns have led to calls for a ban or stricter regulations on the app, citing the possibility that TikTok's parent company, ByteDance, could be compelled to share data with the Chinese government under Chinese law. In response to these concerns, TikTok has repeatedly assured US lawmakers that it operates independently of the Chinese government and that user data is stored securely in the United States. However, these assurances have done little to quell the growing anxiety over the app's potential for espionage or influence operations. With several states already implementing bans on TikTok on government-issued devices, the platform's future in the US remains uncertain. Despite these challenges, TikTok continues to thrive, particularly among younger generations. For the White House, engaging with this demographic is crucial, given that many of the issues the administration focuses on—such as climate change, healthcare, and social justice—are central to the concerns of younger voters. By establishing a presence on TikTok, the White House can directly communicate its messages to a wider audience, bypassing traditional media channels that may not always align with its narrative. However, some political analysts have raised questions about the potential risks of using TikTok, particularly in light of the app's perceived ties to Beijing. Critics argue that the White House's decision could be seen as tacit approval of the platform's data practices and its potential for influence. Moreover, the fact that TikTok's algorithm is designed to encourage the rapid spread of content, including political messages, raises further concerns about the platform's ability to shape public opinion in ways that may not always be transparent. For its part, the Biden administration has defended the use of TikTok, highlighting its effectiveness in reaching younger voters who are increasingly sceptical of traditional political institutions. Administration officials have also pointed out that many other world governments, including those in Europe and Asia, have embraced TikTok as a tool for communication, citing its potential to engage citizens in innovative ways. As the debate surrounding TikTok's security risks continues, the White House's decision to join the platform reflects a broader trend in which governments are increasingly turning to social media to shape political narratives. While some view this as a pragmatic response to the changing media landscape, others remain concerned about the potential risks posed by the app's operations. Only time will tell whether TikTok's influence in the US will continue to grow or if mounting concerns will ultimately lead to its decline in the country.
Arabian Post
7 hours ago
- Arabian Post
US Leads Greenfield FDI in Saudi Arabia for 2025
The United States has emerged as the dominant force in greenfield foreign direct investment in Saudi Arabia for the first half of 2025. Accounting for 61 projects with a combined value of $2.7 billion, American investments represented nearly a third of the total project count and capital investment during the period, according to a report by Emirates NBD. Saudi Arabia continues to be an attractive destination for global investors, benefiting from its Vision 2030 reform programme, which aims to diversify the economy away from oil dependency. This strategy has driven significant foreign capital into various sectors, from real estate to technology and infrastructure. The U. S. has capitalised on this with robust participation, reaffirming its growing stake in the Kingdom's economic transformation. A key driver behind the U. S. investment surge is the Kingdom's large-scale infrastructure projects and its push for technological advancement. As part of the Vision 2030 plan, Saudi Arabia has been encouraging the development of smart cities, green technologies, and renewable energy solutions. Many American companies have seized opportunities in these sectors, contributing to the sharp rise in greenfield FDI from the U. S. ADVERTISEMENT The substantial $2.7 billion investment from the U. S. follows a pattern of rising interest from American businesses looking to establish a foothold in the Middle East's largest economy. Companies from various industries, including construction, energy, technology, and healthcare, have been particularly active, attracted by the government's incentives and the Kingdom's ambition to position itself as a global business hub. Egypt ranks second in terms of capital investment into Saudi Arabia, contributing $1.81 billion through 11 projects. These investments are primarily focused on the real estate sector, with major developments pushing the capital inflow. The surge in real estate development aligns with Saudi Arabia's plans to expand its residential and commercial infrastructure to accommodate its growing population and the influx of foreign workers. China has also played a significant role, contributing $858.3 million in greenfield FDI across 11 projects. Despite a smaller share of the total, China's investments are noteworthy, with Chinese firms increasingly involved in sectors such as construction, renewable energy, and technology. This continued engagement highlights China's ongoing strategic interest in the Middle East, especially as it seeks to expand its Belt and Road Initiative projects in the region. France's contributions have been slightly more modest, with $771.7 million invested across six projects. French businesses have targeted sectors such as luxury goods, healthcare, and technology, with an eye on capitalising on Saudi Arabia's growing consumer market. France's involvement further signals the diverse range of global powers interested in the Kingdom's long-term economic growth. The UAE, a close regional partner to Saudi Arabia, also made notable contributions. UAE investors were involved in 25 projects worth $205.3 million. While this is a smaller share compared to other countries, the UAE's investments are still substantial, reflecting its desire to strengthen its economic presence in the region. These ventures span multiple sectors, including construction, hospitality, and financial services, areas where UAE-based firms have established themselves as leaders. Saudi Arabia's economic diversification strategy appears to be paying off, with global investors increasingly attracted to the Kingdom's business-friendly environment and long-term growth prospects. Greenfield FDI, which typically involves setting up new businesses or expanding existing operations, is seen as a strong indicator of foreign confidence in the local economy. The surge in investment projects is a testament to the effectiveness of Vision 2030 policies in reshaping Saudi Arabia's economic landscape. One of the factors behind Saudi Arabia's successful draw of greenfield FDI is the significant improvement in its business climate. Efforts to streamline regulations, enhance legal frameworks, and incentivise foreign investments have played a crucial role. Furthermore, the development of special economic zones and the introduction of regulatory reforms have made it easier for international firms to establish operations.
