Maaden’s Q4 EBITDA misses estimates as fertilizer prices surprise: SICO
Saudi Arabian Mining Co. (Maaden) has reported EBITDA of SAR 920 million (+21 percent YoY) in Q4 2016, missing SICO Investment Bank’s estimate by 7 percent, as fertilizer volumes and prices surprised negatively, and Ad Duwaihi mine ramp up was slower than expected, the investment firm said.
Maaden’s performance in 2016 was strong, despite commodity price pressures and costs that continued to surprise positively.
EBITDA grew 3.5 percent YoY to SAR 3.7 billion in 2016, despite cycle-low commodity prices. Cash from operations was flat YoY despite a SAR 0.57 billion increase in cash interest expenses.
SICO raised EBITDA estimates by 25 percent on average over 2017-2020, based on revised commodity price assumptions like gold and DAP.
The Bahrain-based brokerage also revised down cash cost projections based on the company’s FY16 performance.
SICO raised Maaden’s target price to SAR 45 from SAR 31, and maintained a “neutral” recommendation on the stock.