These factors could affect Q3 earnings of Saudi-listed companies
Argaam has compiled a list of fundamental events that are expected to have either a positive, or negative impact on Q3 earnings of several Saudi-listed companies.
Note: This list doesn’t include newly-signed construction contracts.
Petrochemicals
Nama Chemicals Co. will be reassessing the book value of its factory and machines assets to calculate possible impairment. The company expects the outcome of assessment to have an impact in the third quarter.
Sipchem saw a technical malfunction at its Carbon Monoxide plant, which is expected to have a SAR 17 million financial impact in Q3.
Petro Rabigh conducted maintenance at its Ethane cracker. The stoppage will have a SAR 350 million negative impact on Q2-2016 and Q3-2016. Operations stopped eight days in the second quarter, and 17 days in the third.
Cement Sector
Umm Al Qura Cement started commercial production at its cement factory started on Sept. 18. The company, however, said it’s hard to asses financial impact of operations because it’s closely connected to supply and demand.
Healthcare
Saudi German Hospital said it was getting SAR 13.6 million in tax refund.
Financial impact of will reflect throughout 2016 to 2018.
Al Hammadi said it has restarted operations of al Olaya Hospital in August.
Retail
Electronic retailer, eXtra, has said that consultancy fees for preparing a letter of intent to buy 51 percent in International Provinces co. will cost it SAR 5.2 million and will be reflected in Q3.
Telecom Sector
Saudi Arabia’s telecom authority recently passed a new system requiring all telcos to use fingerprint system to register their clients. The decision is expected to result in a drop in the number of subscribers for all operators: Saudi Telecom, Zain Saudi, and Mobily. During Hajj season, however, the market saw high demand for prepaid SIM cards. This is expected to reflect positively reflect on Q3 results.
Agriculture & Food Sector
Halwani Bros. finished building the second phase of its dairy factory and launched full operation of the industrial complex in Jeddah in July. The company expects financial impact to reflect during Q3.
Asharqiyah Development Company had reported a fire that erupted in its spare parts warehouse earlier this year. The company still hasn’t assessed the financial impact.
Industrial Investment
Prince Alwaleed bin Talal’s Kingdom Holding has sold its Four Seasons Hotel Toronto. The company realized a capital gain of SAR 48 million that will be reflected in Q3. The group also said it will realize SAR 150 million losses in Q4 from its AccorHotel deal.
Maaden expects to start commercial production of Jabal Sayid copper mine, with financial impact set to be reflected in Q3-2016.
Glassmaker, Zoujaj, is currently rebuilding and upgrading production lines in Riyadh for SAR 75 million. The company expects 12 percent drop in annual sales.
Construction & Building
Saudi Ceramics said it will record a SAR 25 million provision in Q3-2016 for an expected loss in Ceramic pipes investment. The company has also started commercial production at its sanitary ware plant, which will see sales grow to SAR 140 million from SAR 75 million when operating in full capacity. Financial impact will be reflected by end of Q3.
Vitrified Clay Pipes this quarter saw a partial halt of production on low demand. As a result, production capacity fell 15 percent to 20 percent of its annual 200,000 tons.
Red Sea Housing Services Co. is starting to build SAR 57.52 million residential complex in Kuwait. Financial impact will be reflected in Q3.
Alandalus Property is expanding by adding 4,000 meters of retail space for rent at Alandalus mall. Financial impact had reflected on Q2, and will continue to show throughout Q4 this year.
Earlier this year, Bahri signed a memo of understanding to buy oil tankers at a cost of $166.5 million. Impact reflected on Q2 and will show also on Q3.
Saudi Public Transport Company (SAPTCO) saw high demand for inter-city transport during hajj season, and expects that to reflect positively on Q3 results.
Media & Publishing
Saudi Printing & Packaging Co. launched a new production line at an Abu Dhabi-based plastic plant, and as a result, expects a sales increase of about SAR 6.6 million, and net income of SAR 500,000 starting Q3-2016.
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