Saudi Basic Industries Corp (Sabic), the world’s fourth-biggest petrochemicals firm, expects business performance to be positive in the first quarter of 2021 after an uptick in chemical prices but remains cautious given COVID-19 uncertainty, its CEO said on Sunday.

Saudi Aramco’s acquisition of a 70 per cent stake in Sabic will have a financial benefit worth $3 billion to $4 billion, Yousef Abdullah al-Benyan told reporters on a virtual news conference.

“There is an enhancement of cooperation between Sabic and Aramco. As mentioned, God willing, the benefits between the two companies are expected in the range of $3-4 billion.

Sabic’s share of that is from $1.5-1.8 billion,” the chief executive said.

Sabic posted a net profit of 2.22 billion riyals ($592 million) in the fourth quarter, reversing a net loss of 890 million riyals a year earlier as the impairment charges it took on certain capital assets were reversed.

“Our outlook is that Q1 is going to be more or less equal to Q4 given the improvement we have experienced. We have seen an average 13 per cent improvement in chemical prices,” Benyan said, adding, however, that prices remain lower than 2019 levels.

“We are very, basically, optimistically cautious in terms of where we are moving. However, I think the implications of COVID-19 are unknown to anybody.”

Benyan said that any restrictions on travel or economic activities in major markets like Europe, the United States or China could lead to pressure on demand and subsequently have implications for the chemicals industry.

SABIC said earlier in a bourse filing that the non-recurring gains in the fourth quarter were 450 million riyals, primarily due to the adjustments to certain impairment provisions.

The company also saw higher sales volume and lower average cost of sales during the quarter.

Chemicals maker Saudi Basic Industries Corp expects sales and earnings to increase this year after it beat analysts’ estimates by making a profit in 2020.

The Riyadh-based firm said it sees the global rollout of coronavirus vaccines leading to a 2 per cent to 5 per cent gain in revenue this year.

Pretax income will be “moderately higher” than in 2020, while capital expenditure will be similar, Sabic said in a results statement.

Sabic earned net income of 40 million riyals ($10.7 million) in 2020. Sabic’s net income between October and December was 2.2 billion riyals, more than double the figure for the third quarter.

“The fourth quarter benefited from sustained economic recovery,” said Chief Executive Officer Yousef Al-Benyan.

“Distributing competitive dividends to our shareholders continues to be paramount and this is supported by our firm commitment to maintaining capital discipline, as well as our ability to uphold a strong balance sheet and credit rating.”

In December, the company’s board announced a dividend of 1.5 riyals per share for the second half of 2020, unchanged from the first half.

“The COVID-19 accelerated business trends, innovations and global citizenship in profound ways.” That was the message from Yousef Al-Benyan, Sabic vice chairman and CEO, as leaders, investors and policymakers participated in the Future Investment Initiative (FII) in Riyadh on Jan.28.

Now in its fourth year, the conference was hosted by the FII Institute, a newly established non-profit global foundation, at the King Abdul Aziz International Conference centre (KAICC) in Riyadh, with speakers and audiences joining physically and virtually from FII satellites in New York, Paris, Beijing and Mumbai.

Al-Benyan was speaking as part of a panel discussion titled ‘The new CEO Playbook: How Leaders are reinventing work for the post-COVID world’.

He said: “The pandemic has been a catalyst for many changes that were already under way. It demanded a rethink on the future of work and the value that companies can create for employees, shareholders and wider society. The companies which thrive tomorrow will be those who best understand and embrace the opportunities emerging from these radical changes, new technologies and dynamic modes of work.”

He added, “The New Normal also brings a renewed urgency to environment, social and governance priorities. Employees, customers and stakeholders now expect that we will do everything in our power to ensure the environment we share does not become a casualty of the world’s prosperity. To achieve sustained global growth, large companies must elevate their global citizenship and generate value beyond the bottom line.