Yanbu Cement’s Q1 net profit of SAR 124 million beat Al Rajhi Capital’s estimate of SAR 82 million and consensus estimate of SAR 91 million, the brokerage said in an earnings review on Wednesday, adding that it had factored in lower sales prices and higher costs per ton.
Revenue came in at SAR 296 million, against Al Rajhi Capital’s SAR 260 million estimate.
The company sold 1.6 million tons of cement in Q1, down 13 percent year-on-year (YoY) and holds inventory of 3 million tons, representing 48 percent of sales volume over the last 12 months.
On the pricing side, the cement firm was able to improve its average realized price per ton by 22 percent quarter-on-quarter to reach SAR186/ton (down 15 percent YoY).
“Despite the improvement in selling prices for Yanbu and Arabian cement in Q1, we don’t expect this to continue given the weak demand and oversupply situation in the western region as well as high export fees”, Al Rajhi Capital said.
The brokerage maintained the stock’s target price at SAR 32.0 and upgraded its rating to “Neutral”.
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