NCB Capital maintained neutral rating on Saudi Electricity Co, with share target price of SAR 18.1. It noted that strong government support and a fixed dividend of SAR 0.7 are key stock positive.
SEC reported a net income of SAR 4.4 billion, significantly higher than the NCB Capital’s estimate. Net income increased 51 percent YoY and 209 percent QoQ.
“We believe the record high revenues and better than expected gross margin were the key reasons behind the deviation,’’ NCBC said.
Revenues stood at SAR 17.2 billion in Q3-16, an increase of 29.8 percent QoQ and 30.1 percent YoY.
The company attributed the YoY and QoQ increases in earnings to higher sales and improved operational efficiency, which offset the negative impact of high fuel prices.
NCBC said seasonal factors were the main reason behind strong earnings in 3Q16. SEC generally reports losses in the winter season as demand for electricity declines sharply.
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