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.
Al Othaim Markets is expected to see revenue growth of 18 percent YoY.
The cement sector is unlikely to see an improved sales volume in Q1-2017, as City Cement Co. was the only producer that reported positive growth by 16 percent YoY in the first two month of this year.
Saudi Telecom Co. (STC) is expected to manage its costs well and achieve healthy profitability as seen in the past quarters.
The food sector will see consumption slowdown affecting revenue growth. However, margins are expected to improve YoY due to lower commodity prices.
Savola Group is expected to have lower profit growth, while Almarai and Herfy are likely to benefit from improved margins.
Healthcare companies are expected to post a moderate revenue growth in Q1-2017, as their focus will remain on any impairment of receivables and its impact on the net profit.
Al Hammadi Company for Development and Investment is expected to see higher results in Q1-2017. However, National Medical Care’s revenue is not expected to recover, as the Malaz hospital is not fully functional yet.
|
Al Rajhi Capital Q1 Estimates (SAR mln) |
||||
|
YoY Variation |
Q1-2016 estimates |
Company |
||
|
Petrochemical Sector |
||||
|
63% |
5,551 |
SABIC |
||
|
158% |
131 |
Sipchem |
||
|
54% |
440 |
SAFCO |
||
|
-- |
164 |
Tasnee |
||
|
73% |
696 |
Yansab |
||
|
9% |
159 |
Advanced |
||
|
Cement Sector |
||||
|
(74%) |
59 |
Arabian Cement |
||
|
(79%) |
32 |
Yamama Cement |
||
|
(39%) |
161 |
Saudi Cement |
||
|
(48%) |
71 |
Qassim Cement |
||
|
(55%) |
82 |
Yanbu Cement |
||
|
(54%) |
129 |
Southern Province |
||
|
Telecommunications Sector |
||||
|
(7%) |
2,207 |
STC |
||
|
-- |
(14) |
Mobily |
||
|
-- |
(107) |
Zain |
||
|
Agriculture & Food Industries |
||||
|
17% |
361 |
Almarai |
||
|
73% |
161 |
Savola |
||
|
4% |
56 |
Herfy |
||
|
(10%) |
128 |
Airlines Catering |
||
|
Retail Sector |
||||
|
9% |
190 |
Jarir |
||
|
-- |
61 |
Al Hokair* |
||
|
21% |
57 |
Al Othaim |
||
|
-- |
13 |
eXtra |
||
|
Healthcare Sector |
||||
|
10% |
64 |
Dallah |
||
|
-- |
71 |
Mouwasat |
||
|
(58%) |
14 |
Care |
||
|
72% |
37 |
Hammadi |
||
|
Other Sectors |
||||
|
(37%) |
107 |
Maaden |
||
|
(56%) |
12 |
Al Hassan Shaker |
||
|
(52%) |
291 |
Bahri |
||
Comments
{{DisplayName}}
{{ElapsedTime}}