Sabic AN profit hit by lower sales and higher shipping costs

Saudi fertiliser producer Sabic Agri-Nutrients (Sabic AN) reported a sharp drop in third-quarter 2026 earnings, primarily as a result of logistics disruption due to the closure of the Strait of Hormuz.

Net earnings plunged 62 percent year on year to SAR484 million ($129 million) between July and September, driven by lower sales and higher shipping costs as ongoing supply chain challenges continued.

Revenue declined almost 9 percent annually as a result of higher transportation costs and lower sales volumes.

Nine-month profit and revenue dropped 37 percent and 14 percent, respectively, driven by a decrease in sales and average sales prices.

Gulf fertiliser companies face a difficult 2026 as disruption in the Strait of Hormuz has limited exports and sent transport costs soaring.

Production costs are about $150-$200 per tonne, Yousef Husseini, director of chemical equity research at EFG Hermes in Cairo, told AGBI. Urea prices averaged about $420 in the third quarter, leaving little profit after logistics expenses, he added.

Sabic AN, which is 50 percent owned by Saudi Basic Industries Corporation (Sabic), said in September it was expanding its annual urea production capacity from 4.8 million to 7.4 million metric tonnes, up 54 percent, through a new industrial complex in Saudi Arabia.

Shares of Sabic AN were trading at SAR109.90 at the close of trading on Monday, down about 0.7 percent year to date.

In June 2020, Saudi Aramco acquired a 70 percent majority stake in Sabic, which also trades on the Saudi bourse, for $69 billion. The remaining 30 percent is publicly traded on the Saudi stock exchange.

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