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Saudi petrochem giant SABIC profit falls

Riyadh - Saudi petrochemicals giant SABIC reported Sunday a 4.48% fall in profits for the third quarter of 2014, while its chief forecast that oil prices will recover over the long-term.

SABIC, the largest publicly traded firm in the Gulf, said net profit for the three months up to September 30 was 6.18bn riyals ($1.65bn) against 6.47 billion riyals in the third quarter last year.

"The decrease in net income is attributable to lower quantities sold and other income, despite lower financial charges," a statement from Saudi Basic Industries said.

SABIC is one of the world's largest petrochemicals manufacturers, producing chemicals, fertilisers, plastics and metals.

Mohamed Al-Mady, the company's vice-chairman and CEO, said oil prices have "a direct impact on the petroleum industry" but the recent fall in the price of crude - which helped lower costs - will not last.

"What has taken place is a temporary lower price," he told reporters.

"There is an increase in the global population, so undoubtedly the oil price will increase in the future."

The benchmark US oil price has fallen to levels not seen since mid-2012, while in London, Brent North Sea crude is near a four-year low.

Prices have tumbled as excess supply and weaker demand create a glut on world markets.

Saudi Arabia is the OPEC cartel's leading crude producer.

Despite a year-on-year fall in third-quarter net profit, SABIC reported a 0.05% rise in net profit for the first nine months, to 19.08 billion riyals from 19.07 in the same period last year.

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