Al Rajhi Cap issues Q1 forecasts; SABIC to top SAR 5 bln
Al Rajhi Capital on Sunday issued its first quarter 2017 earnings forecasts for 30 Tadawul-listed companies under its coverage.
Petrochemical producers are expected to see a boost in earnings as improved spreads are likely for most companies.
Higher prices in Saudi Basic Industries Corp’s (SABIC) diverse portfolio is expected to drive its profitability to SAR 5.6 billion in Q1, the highest since Q3 2015.
Saudi International Petrochemical Co.’s (Sipchem) operating income is likely to improve further in Q1 due to higher product spread on account of increased product prices coupled with its largely fixed feedstock costs. The brokerage has an “Overweight” rating on Sipchem.
APC is likely to see lower spreads, while the impact on Yansab’s profitability will be limited, as higher feedstock costs will be offset by increased product prices, particularly MEG (+30% quarter to quarter).
The retail sector is expected to witness higher net profit for Q1-2017. Electronics retailers will continue to benefit from the market share gains driven by the mandatory Saudization of mobile shops.
Jarir Marketing Co., which is aggressively opening stores, is expected to see a 16 percent year-on-year revenue growth, while eXtra would likely record a 7 percent growth.