Saudi Basic Industries Corp (SABIC) beat analysts' forecasts with a 5.43 billion riyals ($1.45 billion) net profit in the first quarter after improvements in both prices and demand.

The world's biggest petrochemical firm by market value beat four out of six forecasts and the average of 5.23 billion riyals in Reuters survey. Profit also improved compared to the 4.58 billion riyals SABIC made in the fourth quarter.

SABIC, whose earnings serve as a yardstick for those of other petrochemical majors such as Germany's BASF and Dow Chemical, had shocked markets with a loss of 974 million riyals in the first quarter of 2009.

"The improvement in net profit ... stems from a rise in volumes (and) a noticeable improvement in prices of most petrochemicals and plastics," SABIC said in a statement after markets closed on Saturday.

Hesham Abu-Jamea, head of asset management at Bakheet Investment Group, said: "SABIC's earnings show that it is performing well compared to the pace of the global economic recovery.

"But the global crisis is not a thing of the past. Prices of SABIC products are still below their levels at the time whe the firm was making above 7 billion riyals in quarterly net profit," he added.

Shuaa Capital analyst Laurent-Patrick Gally said the steel unit may have "spoiled" what could have been a "really nice quarter" but given a recent 32% average increase in steel prices it was unlikely it would harm second quarter results. Operating profit stood at 9.71 billion riyals for the quarter up from 0.38 billion riyals a year earlier.

Earnings per share were 1.81 riyals by end-March up from a net loss per share of 0.32 riyals a year ago. The company reiterated that new capacity from its Yanbu National Petrochemical Co (Yansab) and Eastern Petrochemical Co (Sharq) affiliates coupled with a "gradual exit out of the global financial crisis" would help the firm's performance. It did not set a timeframe.

"The start of Yansab and Sharq should enable SABIC to make a a net profit in the second quarter higher than in first-quarter. We expect it to be around 6.25 billion riyals," said Abu-Jamea. Last week, Yansab posted its first profit in two years as it started of commercial operations and as the prices of its products improved.

SABIC usually does better in terms of profitability than rivals because it purchases feedstock at lower prices.