UPDATE 1-SABIC sees positive Q1 though cautious over COVID-19

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LONDON/DUBAI, Jan 31 (Reuters) - Saudi Basic Industries Corp , 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% stake in SABIC will have a financial benefit worth $3 billion to $4 billion, Yousef 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 is 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% 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.

$1 = 3.7508 riyals Reporting by Saeed Azhar and Yousef Saba in Dubai and Marwa Rashad in London; Editing by Sam Holmes and Andrew Cawthorne