Qassim Cement Co. posted a net profit of SAR 70 million for Q2 2019, which was significantly higher than NCB Capital’s and consensus estimates of SAR 47 million and SAR 53 million, respectively.
The earnings growth was driven by higher sales volumes and selling prices, the brokerage firm said in an earnings review.
The second quarter sales of SAR 155 million were higher than NCB Capital’s estimates of SAR 118 million.
Gross profit margins rose significantly to 48.9 percent in Q2 2019, higher than the investment bank’s expectations of 45.6 percent.
NCB Capital recommended a “Neutral” on the stock and set its target price at SAR 42.9.
“The stability of high selling prices for Qassim Cement and other players is a key positive,” the brokerage firm noted.
“We expect demand from mega projects to begin by Q1 20, which would be the key catalyst for the sector,” it added.
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