Yansab’s Q4 2019 net profit misses estimates: Riyad Cap

Yanbu National Petrochemical Co.’s (Yansab) Q4 2019 net profit of SAR 171 million came below Riyad Capital’s and analysts’ estimates of SAR 260 million and SAR 234 million respectively, the brokerage firm said in a report.

The difference was attributed to booking a SAR 71 million accounting provision by the company, which if excluded, Q4 results would have been SAR 242 million, the report added.

The investment arm of Riyad Bank further noted that despite the relatively weak margins, the debt free financial position, strong cash flows and high cash balance indicate that the profit distributions will remain unchanged or even grow in 2020. 

Riyad Capital upgraded its recommendation on Yansab from “Neutral” to “Buy” and raised the per share target price from SAR 57 to SAR 60.

A “buy” recommendation according to Riyad Capital means that the expected returns are higher that 15%.

According to data compiled by Argaam, Yansab reported a net profit of SAR 1.09 billion for fiscal year 2019, down by 54.8% year-on-year (YoY) driven by lower selling prices.