Operationally, SABIC’s Q1 2026 results were mixed but better than the headline revenue implies: revenue fell 6% quarter on quarter to SAR 26.15 billion; however, adjusted EBITDA rose 25% to SAR 4.15 billion, while adjusted EBIT improved to SAR 1.45 billion, showing a clear margin improvement.

Overall, pricing and margins were better across the portfolio, even with lower volumes. Lower sales volumes were partially offset by higher average selling prices, according to SABIC. As compared to Q4 2025, the adjusted EBITDA margin increased to 15.9%.

Despite decreased gross revenue, adjusted EBITDA jumped to SAR 2.36 billion from SAR 1.84 billion in Q4, thanks to tighter supply and stronger product pricing.
Agri-Nutrients was the standout in profitability, with EBITDA rising to SAR 1.37 billion and EBIT to SAR 1.17 billion, supported by stronger urea pricing and seasonal demand.
Specialties also improved, with adjusted EBITDA up to SAR 0.44 billion, reflecting resilient demand in high-end applications.

According to CEO and executive board member FAISAL ALFAQEER, “CEO and executive  “we are advancing several capital projects disciplinedly. The execution of the SABIC Fujian project continues as planned, with approximately 98% completion. The Ministry of Energy’s announced feedstock allocation approval enables the potential expansion of our annual urea production capacity from approximately 4.8 million tons to 7.4 million tons,  a 54% increase. This milestone reinforces our position as a national champion and global leader in the nitrogenous fertilizer market.”

Added that the company has signed a strategic agreement with the Public Investment Fund–Pirelli joint venture. Providing the joint venture with the capability to manufacture 3.5 million tires annually in the Kingdom. “This agreement contributes to Saudi Arabia’s long-term economic development and industrial growth while supporting our NUSANED localization agenda.”

Balance sheet and cash

A rise in working capital resulted in negative free cash flow of SAR -0.27 billion, the weakest part of the release.
The company also moved from a net cash position of SAR 3.61 billion at the end of 2025 to a net debt position of SAR 2.77 billion at the end of Q1 2026, which is still manageable but worth monitoring if CAPEX continues to rise.

Predictive view of mining and Iran war

The Q1 message from SABIC is constructive for Saudi Arabia’s mining-related businesses and industrial demand: Agri-Nutrients, Specialties, and localization projects suggest strong domestic industrial demand, while Saudi Arabia’s planned mining exploration rounds in 2026–2027 should stimulate downstream chemical demand as well.
SABIC’s portfolio mix is supported by chemical demand for fertilizers, packaging, processing, and infrastructure if mining activity accelerates.

A significant short-term variable for the petrochemical outlook is the Iran war. In industry coverage, the conflict and Strait of Hormuz disruption tightened ethylene, methanol, PX and other feedstock flows, raising petrochemical and plastic prices and raising energy security concerns.
In the near term, that will benefit SABIC’s pricing and margins, especially in polymers and chemicals, but it will also increase supply-chain risk, freight risk, and input cost volatility.

Forward view

In Q2–Q3 2026, SABIC’s earnings could remain strong if product prices remain firm, especially in polymers and fertilizers, but revenue growth may still be constrained by soft global demand.
Petrochemical prices are likely to remain elevated, and margins will improve if Middle East supply disruptions continue.
A rapid easing of geopolitical tensions coupled with weak industrial demand is the biggest downside scenario. In this way, spreads would be pressed, and the unusually strong pricing environment would be normalized.

Essentially, SABIC’s quarter showed “lower volume, better earnings quality.”
Taking a mining/industrial perspective, the result is positive for downstream materials demand in Saudi Arabia. However, the Iran confrontation contributes short-term price support but also adds operating risk.

Source : https://www.sabic.com/en/news/51240-sabic-announces-financial-results-for-the-first-quarter-2026 

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