Welcome to SABIC's Q2 2025 earnings call. This is Sarah Alzamami, acting as a moderator. Please note that the call is being recorded. A transcript of the recording, together with supplementary materials, will be published on the Investor Relations webpage on SABIC's website. Today's earnings call will feature SABIC CEO, Engineer Abdulrahman Al-Fageeh, its CFO, Mr. Salah Al-Hareky, and its IRO, Mr. Naif AlAyed. Naif will now take us through an outline of today's event. Thank you, Sarah, and thanks to those of you who are joining the SABIC Q2 2025 earnings calls. Let me begin by pointing out that forward-looking statements will be made in this call. These statements are based on assumptions filled with risk and uncertainty, so they are not a guarantee of SABIC's future performance. Actual outcome may differ materially from what the statements imply. For the details about our forward-looking statements, please refer to the disclaimer in the presentations and our financial reports, both are available at sabic.com. With the disclaimer out of the way, the earnings call will start with a presentation by our CEO. He will briefly describe the market context that influenced our industry performance in the second quarter of 2025. This will be followed by a rundown of some key points with respect to SABIC Q2 2025 performance and priorities. Thereafter, the CEO will outline SABIC's current transformation programs before revealing the expected industry market movements. The CFO will then take over the call to walk you through SABIC's aggregate financial performance, focusing on the second quarter of 2025. Afterward, our CEO will return to provide a brief outlook for the rest of the year. We will end the call with an open line Q&A session. I ask the participants to relate the topic of their question to SABIC's corporate performance and avoid referring to listed affiliates. Now, please join me in welcoming SABIC CEO, Engineer Abdulrahman Al-Fageeh, to the call. Shukran, Naif, and thanks to you all for joining us today in this earnings call. Let me begin with a brief overview of the macroeconomics and industry landscapes. The second quarter of this year's 2025 GDP growth rate was only 2.5%. Tariff and trade uncertainties, as well as slow business activities in major markets, have put pressures on the global economy. Hovering at 50, the quarterly Manufacturing Purchasing Manager Index remains weak as new orders slowed amid the global trade uncertainties. In the global petrochemical industry, overcapacity remains a challenge. Operating rates remain below the historical global average, and the oversupply combined with the macroeconomic uncertainties put margins under pressure, as I have said. I now would like to mention six highlights of the quarter. This reflects the strength of our commitment to meet our 2025 priorities: operational excellence, transformation, selective growth, and value creation. First, health and safety. The total recordable incident rate for Q2 is 0.07. This once again underscores SABIC's top priority, which is part of our operational excellence. Second, value creation for our shareholders. Aligned with our commitment to create value for the shareholders, SABIC's board has approved a total distribution of $1.2 billion for the first half of 2025. Amid ongoing market challenges in the chemical industry, we took a disciplined decision to adjust the dividends in line with current conditions. We remain firmly committed to a balanced capital allocation approach, ensuring competitive dividend distributions across the cycle, supporting long-term value creation. Third, portfolio optimization as part of our ongoing journey. We reached two key milestone decisions in Q2. First, the closure of our Teesside cracker in the United Kingdom. Second, our intention to evaluate a strategic option concerning SABIC's subsidiary, the National Industrial Gases Company. Both milestones will be addressed in more detail later in this call. The fourth highlight is related to the value created through customers' outreach and intimacy, resulting in tailored solutions in which mutual growth and long-term partnership are based. In Q2 2025, we successfully introduced 58 new products for our customers. Also, we introduced a new internally developed technology platform called Mega Molding that combines our expertise, data tools, and materials specifically for the production of large thermoplastic parts that help manufacturers replace heavy material, thermosets, sheet molding compounds, and other conventional materials with high-performance thermoplastics, offering significant weight reduction, cost saving, and greater design flexibility. The fifth highlight pertains to value creation on the basis of the quality of our products. SABIC affiliates received Gold, Silver, and Bronze awards at the seventh King Abdulaziz Quality Awards. On the basis of positive customer feedback, SABIC was honored with the Best Polymer Products or Producers Award in the LLDP, which is the Linear Low Density Polyethylene category by the Polymers Europe Alliance and the European Plastics Converters Association. The last highlight of the quarter concerns the solid progress we have made in our key growth projects. The SABIC Fujian Petrochemical Complex in China, the flagship project of our strategic expansion in Asia, is on track for mechanical completion in the second half of next year. The MTBE project at our Petrochemia affiliates in Saudi Arabia is progressing well in accordance to planned cost and schedule. The ABC phase is more than 95% complete. Commissioning will occur during the third quarter of this year, with the ramp-up to the on-spec production expected in the last quarter of this year. I mentioned that transformation is one of our 2025 priorities, but it actually is just another stage of a company-wide transformation that began back in 2021. I now would like to take a moment to go into a little more detail about the current program in our transformation journey. We have designed the new phase of the program to realize the full potential of SABIC's assets portfolio, focusing first on underperforming businesses, sites, and regions. The new phase makes a strategic transformation targeting a reoccurring annual EBITDA in about $3 billion by 2030, driven by $1.4 billion in cost excellence and $1.6 billion in value creation, as we unlock greater value for our shareholders and reshape our performance trajectory. Over the past years, transformation has been part of the SABIC culture. This legacy gives us confidence that we can deliver the $3 billion target value. To ensure the transformation program's success, SABIC is relying on prudent investments, new capabilities, and the latest digital tools. The last of these is part of the digital transformation journey, which I will now describe. At SABIC, digital transformation is not a side initiative. It lies at the very core of how we deliver growth, improve sustainability, and deliver value, essentially when we have built a foundational platform for our operational excellence. Currently, we are upgrading our enterprise resource planning systems so that it digitally integrates our management processes from start to finish. The advanced digital tools that we will upgrade offer support to smarter and faster decision-making. The upgrade plan is 54% completed, and we expect it to go live in the fourth quarter of this year. On the manufacturing side, 496 AI models were deployed to enhance our environmental, health, safety, and security performance, as well as to uphold our energy efficiency and operational excellence. As of today, 42% of our manufacturing facilities now actively use AI-powered tools to gain performance insights, apply automated control, and make smarter decisions. More recently, an AI-based solution was implemented to optimize the planning of our equity distribution and maximize our assets utilization. To maximize the value of digitalization, we set guidelines to provide a structured framework for the governance of the security, ethics, and effective use of AI technologies. This slide finishes the part of my presentation. It shows how demand was stable in Q2 for most of the product sectors, with some growth in industrial, electrical, electronics, hygiene, and healthcare. We expect demand to remain stable across the board next quarter. With that, I will now hand the floor over to SABIC's CFO, Mr. Salah Al-Hareky. He will review the company's financial results and provide additional commentary on our business's strength performance. Salah. Thank you, Abdulrahman, and a warm welcome to everyone joining today's call. SABIC continues to leverage its global footprint in the second quarter of 2025 and generated $9.5 billion in revenue, 3% higher than the previous quarter. This increase was mainly due to higher sales volume offset by lower average selling prices, in addition to licensing and engineering revenue of $230 million realized in the second quarter. The operational performance that underlines our revenue generation is best assessed on an adjusted basis. Therefore, following global best practices, we are introducing an adjusted financial matrix this quarter. The adjusted figures exclude one-off non-operational anomalies that can distort our operational business performance. On an adjusted basis, we achieved an EBITDA of $1.4 billion, a 40% increase over the last quarter. The adjusted EBITDA margin reached 15% compared to 11% in the last quarter. Net income on an adjusted basis has improved quarter over quarter by $148 million, considering adjusted losses of $19 million last quarter. In the first half of 2025, operating cash flow reached $894 million. Considering for CapEx and factoring in proceeds from portfolio optimization and disposal of assets, total cash generation for the first half of 2025 was $1.7 billion. Finally, our net debt position underscores our financial resilience and robust standing. Let me now proceed to our profitability. The 40% quarter-on-quarter improvement in adjusted EBITDA reflects the strength of our diversified product portfolio and our ability to capture value through improved margin and higher volumes. This performance was further supported by the global reach of our technologies, allowing us to respond swiftly to shifting market dynamics and customer demand. At SABIC, we continue to prioritize operational excellence and enhance business resilience. This means disciplined cost management, agile supply chain execution, and persistent focus on efficiency across our operations. Now, let's turn to the progression of our net income. Despite ongoing market challenges, adjusted net income rebounded to $129 million, recovering from a loss of $90 million in the previous quarter, a clear reflection of our focus on operational efficiency and financial discipline. Reported net income came at negative $1.1 billion, primarily impacted by the permanent closure of our Teesside cracker in the United Kingdom. This decision was part of our broader portfolio optimization effort, underscores our commitment to disciplined capital allocation and improving long-term positioning in the European region. Moving to segment profitability, next slide, the petrochemical segment delivered a 3% increase in sales volume, driven by stronger demand in chemicals. However, this was offset by a 3% decline in average selling price, reflecting continued pricing pressure across the global market. Adjusted EBITDA for the petrochemical segment improved by 54%, supported by higher volume and margin recovery across key products. The performance was further strengthened by our ability to leverage SABIC's global technology footprint to enhance efficiency and competitiveness. In total, volume sold during the quarter reached approximately 9.9 million metric tons, reflecting our resilient operating capabilities and strong market presence. Moving to the agri-nutrient segment, the segment revenue grew by 2%, supported by an increase in both volume and prices. While the second quarter is typically a low season for the sector, global supply shortage, driven by shutdowns at several producers, created a favorable window, which SABIC effectively capitalized on both sales volume and pricing. Quarter-over-quarter average selling prices increased by 1%, though the seasonal effect tempers this comparison. A more representative view shows that prices in Q2 2025 were over 30% higher than Q2 2024. Total sales volume for the quarter reached approximately 1.9 million metric tons, reflecting our strong market positioning and ability to respond quickly to shifting supply-demand dynamics. Building on the CEO remark regarding SABIC's transformation journey, we are concurrently repositioning our global footprint through focusing portfolio optimization efforts, with more emphasis on our investment in Europe and America. The petrochemical industry continues to be structurally challenged, including prolonged global overcapacity and sustained margin pressure. In response, we have accelerated our portfolio optimization actions, establishing a dedicated project management office under direct board oversight to drive execution with discipline and urgency. As part of our ongoing portfolio optimization program and building on a prior milestone in 2024, including the investment of Hadeed, Alba, and functional forms, we announced in Q2 our intention to evaluate strategic options of our subsidiary, the National Industrial Gases Company, with an objective to unlock value and strengthen financial flexibility. Moreover, the closure of our cracker Teesside in the United Kingdom is a decision aligned with our portfolio to enhance capital efficiency, strengthen our financial position, and create long-term value for our shareholders. The overarching strategic objective is clear: to address underperforming assets, repositioning our international assets through participating in market consolidation, and exiting non-core businesses where competitive advantage is challenged, in order to redeploy capital toward higher margin growth-oriented opportunities that better support our long-term strategic ambition and ultimately maximize shareholder value. Further updates on our portfolio optimization journey will be shared as we progress toward further execution milestones through the third quarter. Let me end my presentation by emphasizing once again SABIC's unwavering focus on maximizing long-term value for its shareholders. We continue to maintain a strong balance sheet underpinned by a prudent financial framework that ensures resilience through market cycles. Improving profitability and cash generation remain a top priority, with continued effort to reduce costs, create integrated value creation, and enhance capital employed. We are actively driving portfolio optimization and accelerating our transformation to remain competitive and agile amid an evolving industry dynamic. Most importantly, we remain committed to delivering shareholder value through competitive dividends, while strategically redeploying capital toward higher growth, higher margin opportunities, reflecting our confidence in SABIC's financial strength and positioning the company for stronger, more sustainable long-term performance. This concludes the financial highlights. I will hand over back to SABIC's CEO to walk you through our year-ahead guidance. Abdulrahman. Thank you, Salah. Our guidance for the year ahead is based on current economic growth, as reflected in a revised expected global GDP growth rate of 2.3%. Aligned with our commitment to capital discipline and selective growth, our 2025 capital investment is expected to be between $3 billion and $3.5 billion. This concludes the presentation portion of today's call. We can now kick off the Q&A session. Thank you, Engineer Al-Fageeh. To ask a question, please use the raise hand feature on your screen and wait for your line to be open. Make sure to click the lower hand button once the question has been asked. You can also share your questions in writing. Please keep your questions no more than two or three per person to allow for enough time for everyone. The first question is from Faisal Ladma from Goldman Sachs Group. Faisal, please come close to the mic and ask your question. Yes, hi, and thank you for the opportunity to ask questions. Two questions on my side. Just maybe firstly on the dividends. Obviously, we saw the dividends effectively get cut in the first half versus last year. I recall from prior calls we always heard about the kind of like maintaining the dividends flat and growing. Has the policy changed for the year and how should we think about the policy going forward? That's my first question. My second question relates more towards the portfolio optimization. Should we expect more impairments for the year or are you done with the majority of the impairments for 2025? Maybe if you can talk a bit about the operational benefits that you're going to target by 2030. Obviously, $3 billion is a big number. Maybe if you can walk us a bit through how to think about that and how you plan to achieve that. Thank you. Thank you, Faisal. I will take the dividends, and Salah, he might take the other questions. In Q4 of 2024, as you may know, we have introduced the new mechanism of distributing the interim dividends on a biannual basis, starting from this year from 2025, which enhances the board decision-making to maximize the shareholder investment value and the alignment of the company's financial performance. Following the ongoing market challenges in the chemical industry, we took a disciplined decision to adjust the dividends aligned with the current conditions, and we remain firmly committed to a balanced capital allocation approach, ensuring competitive dividend distribution across the cycle while supporting our long-term value creation. Salah? Thank you, Abdulrahman. I think the CEO answered the dividend, but it is very important that we also understand that there is a 100% commitment to our dividend going forward. Our financial framework also talks to our commitment to the dividend. The allocation of capital, as the CEO mentioned, explained very well this commitment through the allocation of capital between our run and maintain and sustaining capital, our dividend, and opportunistic growth. On the second question on the portfolio optimization, the portfolio optimization actually, the decision which was made on the Teesside, this is part of the maximization and prudence of allocating capital. The work on the portfolio optimization is still ongoing. There is an intention to maximize the shareholder loan, of course, and ensure our capital efficiency through repositioning of our investments, specifically in Europe and America. We have actually taken a very much good step where we've actually designed a soft carve-out for our assets in Europe and America, where we have the ETB in Europe and America, and then the Bitcom in Europe. We've actually designed a very clear and stronger accountability framework where we can actually improve and transform the business and also explore opportunity of market consolidation through a partial or full exit in the future. We will provide information as we progress very well. I think there was a question on the transformation. On the transformation, this is the first time when we announced the $3 billion transformation value on the target. We have worked very hard in order to focus not only on the cost reduction because the game of the day, with the consideration of the challenging petrochemical business, is cost, cost, cost. We have a focus on the cost, but also we have a scope on this transformation where we want to create value. The $3 billion, and there is a breakdown for the cost excellence and the value creation. This program has actually started. It started maybe late 2024, but we established the target this year. We've progressed very well. In the first half of the year, we've actually realized $120 million on this program. Of course, $200 million or $225 million, which is the first number, sorry, the first number, $120 million was EBITDA related, and the $225 million is non-EBITDA, which is basically the capital optimization and working capital. Thank you, Faisal. Next question is from Ricardo Rezende from Morgan Stanley. Ricardo, please come close to the mic and ask your question. Hello, and thanks for taking my question. The first one that I have, it's on the CapEx and the CapEx reduction for this year. How much of that $500 million decline was CapEx being pushed to other years, and how much of that was actually savings? Following up on a comment that you just made about the portfolio in the Americas and in Europe, are you also looking at your footprint in Saudi Arabia? We see some reductions there as well. Thank you. Actually, the second question, did you get the second question? Yeah, I got the first one. It's clear. The second question is around the portfolio actions or assessment or studies in Saudi Arabia. In Saudi Arabia. Okay. Thank you very much, Ricardo, for the first question related to the CapEx spending. Actually, we have a big portion of our CapEx in the run and maintain, and we managed to reduce this by 10% this year. Actually, the figure is around $200 million. All growth projects are progressing as per plan, as I explained in my presentation. As you may recall, both the MTBE project at Petrochemia is within the budget, within the schedule. Same thing with the SABIC Fujian in China. It's the same. I think it is within the budget and within the schedule, and there is no delay in this project so far, as far as we know until this point of time. Having Petrochemia that is going to be started, you know, in the fourth quarter of this year, and hopefully, the SABIC Fujian is going to have the commissioning and startup in the second half of next year. Okay. Maybe on the transformation, I think in the presentation, we talked about the focus in Europe and America where we're actually very much challenged. I think it's not only SABIC challenging on those regions. Many companies, many peers have challenged. For the KSA and other regions, we're also focusing on this. The objective of the portfolio optimization is to cover the strategic assets and non-strategic. On the non-strategic front, where we are also seeing there is a competitive advantage for alternatives, we're actually assessing assets. We've taken some steps toward that. For example, Hadeed was one, and we managed to divest our Hadeed. Alba is another example. We're actually now reviewing options, strategic options for the gas, industrial gas. We're also looking into other non-core assets within Saudi Arabia. On the core strategic assets, we are tackling this from two perspectives. One is the transformation, which is actually looking into improving the profitability of our assets in Saudi Arabia and improving efficiency, and also looking into options also to improve the profitability through a partnership. Okay. Okay. Thank you, Ricardo. Next question is from Alex Comer from JPMorgan Alex, please come close to the mic and ask your question. Hello. Can you hear me? Yes, we can hear you, Alex. Okay. Thanks very much for the opportunity to ask some questions. My first question, the licensing revenue from the Fujian, exactly what is that? Maybe you could explain the accounting there. That's the first question. Secondly, we've heard a lot about sort of Chinese involution in recent weeks, i.e., potential closures of plants in China, slowing down our projects. I just wonder, as you've got product on the ground, whether you've seen anything there. A third question, just with regard to Wilton, you talked about this being good capital allocation, but is it because you've already spent the money here? I would have thought that this, on completion, given it's a U.S. ethane import project, would then be, from a variable cost basis, one of the cheaper plants in Europe. To spend the money and then close it down is slightly perplexing to me. Maybe you could just explain that. Finally, if I may, I've heard some rumors about ethane allocations being increased in Saudi Arabia going forward. I just wondered if you've got any update on whether we might see your percentage of ethane feedstock go up. Thanks. Thank you very much, Alex. Actually, I captured very clearly two questions. One related to the licensing of the SABIC Fujian Petrochemical Complex project. The other one is related to the Teesside. Let me address these two first. The licensing revenue, actually, it is part of our business to leverage our know-how, to leverage our technology that SABIC has developed or co-developed with our partners. As you may know, we have more than 11,000 patents around our technologies that we are leveraging in our new project and et cetera. In this quarter, the revenue came from the individual contracts signed by the group, and we were in no significant licensing revenue recognized. If you ask about the compare periods of before, we don't have that. In the Teesside, let me just explain the rationale behind the Teesside. As part of our disciplined portfolio management and burdened capital allocation that we have explained, SABIC made that decision to permanently close the Olefins 6, which is only the cracker in that side of Teesside. That cracker is part of the total complex, including, of course, the polyethylene plants. The company emphasized on the decision as a result of thorough analysis, amid optimizing competitiveness that you mentioned, and aligning with the long-term strategic priority of the company. Also, the action is aligned with the company portfolio review to reduce costs and definitely has to improve the profitability of the company short, medium, and long term. SABIC will continue as part of that exercise too, focusing on the operational efficiencies, driving the shareholders' value, and positioning the company for sustainable long-term growth for profits. The other two questions, they shut down. Can you say that again? Yeah, if you can repeat your question, Alex, they have been talking... Related to China, I don't understand that question. Alex? Some news flow. Sorry. In China, we've heard some news flow with regard to maybe some older plants being closed and maybe some slowdown of new products. I just wondered if you're on the ground, whether you'd seen anything or heard anything there. I was also asking about whether ethane allocations might go up going forward. Yeah, I think the first question is around the shutdown or slowdown plants in China, if there is any impact or if we have seen anything on the ground. okay. The fourth question is around the KSA feedstock and maybe additional ethane allocations. Look, related to the China market, you know, we are active in China for almost 40 years right now. We have an asset base in China, and we are maximizing, actually, SABIC ourselves is the production and the output of what we produce in China. As you may know, a lot of people in the industry nowadays with this overcapacity are looking for a lot of optimization, but I don't think that we have seen some real closure other than what has been announced in the media. The feedstock in Saudi Arabia, as you may highlight it here, and I think we in SABIC try to maximize the output of our plant from the available feedstock in the kingdom. We are fortunate that our crackers in the kingdom are flexible to either crack the liquids as well as the gases. We try to, as usual, maximize the availability of that feedstock and maximize the value for our shareholders through the optimum and optimized cracking of the feedstock. Thank you, Alex. Next question is from Sashank Lanka from Bank of America. Sashank, please come close to the mic and ask your question. Yes, hi. Thank you for the presentation and the opportunity to ask questions. I think most of my questions have been answered. I just have one question with regards to your impairments that we have mostly seen in Europe. Would you be able to provide to us any EBITDA uplift that has been caused post these impairments? If you can give us a geographical split of EBITDA, how your Saudi business is doing versus the U.S. and Europe, that would be quite helpful. Thank you. Okay, so I think we go back to the same question, which is the impairment of Teesside. I think the impairment was actually applied on the cracker, but not the whole plant. The impact of the impairment on the EBITDA was around $60 million, $70 million, so it's not actually big. It was actually, we even adjusted the EBITDA if you've actually noticed. The benefit is significant from a strategic perspective if you consider the whole complex. This is one. With the second question on the KSA asset. It's only the impairment. Okay, you have a second part of your question, Salah? Yes, I was just asking for EBITDA split by geography, if you can provide that. I think I have to say that our EBITDA in both Europe and America is challenged. It's on the negative side. However, our EBITDA in Saudi Arabia is actually significantly positive. We can share with you the numbers if you are interested at a later stage. Thank you, Sashank. Next question is from Alex Estefanous from UBS. Alex, please come close to the mic and ask your question. Good afternoon, guys. Can you hear me? Hello? Can you hear me? Can hear you, Alex. Yes. Thanks for the presentation. Just a few from me, if that's all right. Given the higher levels of inventory that we're seeing in China, do you see any sort of negative headwinds going forward in terms of the revenue contribution from China? That's the first one. In terms of actual chemicals and petrochemicals, which products are seeing the strongest demand? Lastly, as part of your geographic repositioning, do you have an update on what the broader plan is for your stake in Clariant? Let me, I captured the first question on China and the second one on the strong demand. What's the third one? Clariant. Okay. Let me address the first question about the inventory in China, et cetera. The good thing about SABIC, I think we are a global company, and we are managing our business in a global manner. We operate, and our product reaches to more than 100 countries. We have very solid customers that we are dealing with. Most of our business is based on contracts. I think we try to also maximize the value among those 100 countries that we are working in, including, of course, China. The other question about... I think, Paul, if you want me to... Sure. Mainly related to impairment in our investment in Clariant is triggered by the decline of the share price at Clariant. The total impairment during the second quarter was around $193 million. However, this is more of an evaluation of the stock price. The second quarter EBITDA margin of published financials of Clariant is around, I think the margin was 17.5%, which is actually very fair. This is purely an impact of share valuation. Thank you, Alex. Thank you all for the thoughtful questions. The Investor Relations team is available for any pending inquiries and any follow-up from today's call. The contact information is displayed on screen. The earnings call for the second quarter of 2025 has now concluded. Thank you again for attending. You may now disconnect.