Shares of Saudi Kayan fell nearly 2 percent on Tadawul on Monday after the petchem major reported a net loss after zakat and tax of SAR 479.6 million for the first half of 2019.
By 11.20 am Riyadh time, the company scrip was down 1.7 percent at SAR 11.36, with 3.5 million shares, valued at close to SAR 40 million, being traded.
“The loss for Saudi Kayan has been more than expected due to higher financial charges and depreciation expense, while average selling prices have been lower year-on-year,” Muhammad Faisal Potrik, head of research at Riyad Capital, told Argaam.
“We believe the company is generating good operating cash flows and financial charges will decrease over time as it is paying off debt. Kayan is a good long-term investment,” he added.
Riyad Capital maintained its “buy” recommendation on the scrip, with a target price of SAR 16.
Saudi Kayan posted a net loss of SAR 273.1 million in Q2 compared with a net profit of SAR 878.6 million a year earlier due to a decrease in selling prices and higher financing costs.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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