Rabigh Refining and Petrochemical Co.’s (Petro Rabigh) Q3 net losses of SAR 217 million missed Riyad Capital’s estimate for a net profit of SAR 111 million, the brokerage firm said in an earnings review.
The year has been volatile for the company with a wide variation in margins and profitability due to oil price fluctuations, it added.
While revenues are in line with forecast of SAR 6.4 billion, gross margins are “almost non-existent at only 0.4 percent versus our expectations of 6.5 percent.”
“With more than 80 percent of revenues coming from the refining business, Rabigh is going through tough times,” the investment arm of Riyad Bank added.
Meanwhile, the brokerage maintained its full-year forecast of losses for Petro Rabigh at SAR 215 million, and said the company is expected to swing to a net profit of SAR 192 million starting from 2017.
Riyad Capital maintained its “buy” on Petro Rabigh, affirming the stock’s target price at SAR 16.
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