CEO Yousef Al-Benyan said that the company had taken the maximum hit from COVID-19 in the second quarter, but that it had started to see slight improvement in July and August Saudi Aramco completed its acquisition of a 70 percent stake in SABIC from the Public Investment Fund (PIF) in June at a cost of $69.1 billion LONDON: Saudi Basic Industries Corp. (SABIC), the Middle East’s biggest petrochemicals firm, said market conditions had started to improve after reporting a net loss of SR2.2 billion ($586.6 million) in the second quarter. Despite the downturn in the global plastics market from a slowing global economy and a decline in consumption linked to the coronavirus pandemic, CEO Yousef Al-Benyan said that the company had taken the maximum hit from the coronavirus pandemic in the second quarter, and that it had started to see slight improvement in July and August. “Our view is that the second half is going to be more or less an average of the first half or a little bit better,” Benyan said during a press conference. “There is improvement on prices but current indications of a second or third wave of COVID-19 has put more pressure on demand. There is a potential implication on future demand driven by uncertainty we are seeing in the energy market.” Revenue for the second quarter reached SR24.62 billion, down 29 percent from the year-earlier period. “The second quarter saw strong headwinds as global growth declined significantly. This was due to COVID-19 impacting the supply and demand balance for our critical products and the resultant effect on prices and margins,” said Al-Benyan. “In the current tough macro environment, maintaining a strong balance sheet and a strong credit rating on a standalone basis, and delivering competitive dividends to our shareholders are high priorities.” The pandemic has seen more demand for the company’s polycarbonate film used in safety facemasks, while it also manufactures the plastic used in screens for pharmacies, grocery stores and other public spaces. Abdullah Al-Barrak, a financial adviser, said that sales would likely pick up as demand increased in key export markets. “SABIC relies on global markets, which are semi-closed,” he said. “Demand in many of the industrial countries, especially China, has gone down.” Thamer Al-Saeed, chief investment officer at Mad’a Investment Co., said that losses should be viewed in the context of the slowdown in the broader petrochemical sector. “Right before the emergence of COVID-19, the petrochemical industry had seen a slowdown in demand due to the tangible economic decline,” he said. Saudi Aramco completed its acquisition of a 70 percent stake in SABIC from the Public Investment Fund (PIF) in June at a cost of $69.1 billion. The coronavirus pandemic has sen increased demand for the company’s polycarbonate film that is used in the production of safety facemasks, while it also manufactures the plastic used in screens for pharmacies, grocery stores and other public spaces.