Falcom Financial Services has maintained its “Neutral” recommendation on Saudi Arabian Mining Co. (Maaden) but reduced the per share target price to SAR 44 from SAR 49, the firm said in a report.
The company managed to narrow losses level in Q3 2019, reporting a positive surprise to street estimates.
“Maaden’s net loss attributable to the shareholders stood at SAR 92 million for Q3 2019, as despite a rise in the sales volume of flat rolled products (FRP) and ammonia phosphate fertilizers (APF), the realized prices of all core products, except gold, slipped,” the brokerage firm added.
Although the commercial operations of Maaden Wa’ad Al-Shamal Phosphate Co. (MWSPC) and Maaden Rolling Co. (MRC) have progressed as planned and the company expects to witness record production levels in 2019, challenges in the market remain.
Falcom also added that continued focus on operational efficiency and government efforts to increase spending in the mining sector may be insufficient to fuel the currently required sharp upturn in the company’s performance.
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