Financial Performance

Read more about the business environment we faced in 2023 and the outlook for 2024.

While the current market dynamics had a challenging impact on SABIC’s earnings this year, our robust balance sheet underlines strength in our financial stability and competitiveness. Efforts to contain costs, optimize working capital, and focus on efficient capital allocation have contributed to maintaining a strong cash flow position. Despite the challenging economic context, SABIC is committed to providing an attractive dividend to its shareholders, reflecting our dedication to delivering long-term value and stability.

A decrease in sales in 2023 compared to 2022 was primarily driven by lower average selling prices by 21% across all key product lines.

Income from operations (EBIT) in 2023 was largely impacted by lower profit margins for most key products and lower results from integral joint ventures mainly attributable to the decrease in their sales quantities and lower selling prices.

Effects from reduced capacity utilization, impairments, and restructuring provisions related to petrochemical assets mainly in the Europe and Americas regions as well as provisions pertaining to a construction project in Saudi Arabia were partially offset by a decrease in logistic costs.

Income tax and Zakat charges in 2023 was mostly reflecting the lower taxable income in 2023 and the release of uncertain tax provisions.

Net losses from discontinued operations were primarily driven by losses of SAR 2.93 Bn. from the fair valuation of the Hadeed assets as well as losses from the running Hadeed business of SAR 1.15 Bn.

In 2023, a total net loss of SAR 2.77 Bn. was reported, primarily driven by lower profit margins due to soft global demand leading to a decline in average selling prices as well as losses from discontinued operations. Impairments and restructuring provisions were partially offset by fair value gains in embedded derivatives in joint venture agreements, which were recorded in financial income as well as tax and Zakat gains.

Total assets: Reductions in cash positions, inventories, and property, plant, and equipment (the latter due to heightened depreciation and extraordinary impairments) resulted in an absolute reduction in total assets in continuing operations. The assets of Hadeed were reclassified as assets held for sale.

Total liabilities at year-end 2023 increased mainly driven by higher dividends payable and partially offset by lower trade payables.

Equity attributable to equity holders of the Parent at year-end 2023 decreased mainly due to the declared dividends to the shareholders of SAR 16.20 Bn. and reported losses for the year by SAR 2.77 Bn.

Net cash generated from operating activities in 2023 decreased mainly as a result of lower profitability partially offset by cash release from working capital.

Net cash used in investing activities in 2023 decreased driven primarily by lower cash outflow from short-term financial investments partially offset by an increase in the capital injections in investments of associates and joint ventures as well as higher capital expenditures.

Net cash used in financing activities in 2023 decreased primarily reflecting lower dividend payments to both equity holders of the Parent and non-controlling interests as well as higher net borrowing in 2023 versus the prior year.

OUR CREDIT RATINGS & FINANCING APPROACH

Our financing policy aims to ensure sufficient liquidity levels at all times, while optimizing returns to our shareholders. We use leverage prudently to fund our global growth ambitions. Our net debt to EBITDA of -0.46x reflects a strong net cash position at the end of the year of about SAR 8.76 Bn. Our standalone credit ratings have been consistently on the A+/A1 band, among the highest-rated global chemical companies, demonstrating consistent resilience over the last decade versus some of our peers. Both Standard & Poor's Global and Fitch Ratings raised SABIC's corporate rating in 2023 from A- to A and from A to A+, following the upgrade of Saudi Arabia’s sovereign rating.

Read a detailed review of our financial performance for 2023 and access our audited financial statements.

OUR APPROACH TO TAX

SABIC’s approach to tax is to ensure robust tax governance across the group, alignment with SABIC’s overall business objectives, and transparency and compliance with local tax authorities. In all our activities, we are committed to achieving the highest standards in corporate governance and business conduct. Our tax responsibilities are managed in line with this commitment, and we take pride in being regarded as a good corporate citizen.

Read more about our approach to tax.

_{Disclaimer: This abridged interactive version of the SABIC Integrated Annual Report 2023 is based on the original PDF report published on this website. In case of any discrepancy, the original PDF report will prevail.}