National Medical Care Co.’s net profit plunged 67.1 percent year-on-year (YoY) to SAR 19.5 million in Q2 2017, coming in line with Albilad Capital’s estimate of SAR 19 million, but missing consensus forecasts of SAR 25 million, the brokerage firm said in an earnings review.
“The YoY remarkable decline in bottom line during Q2 2017 and H1 2017 was driven by several reasons, including: lower revenues due to applying a new price list for all hospitals by the Ministry of Health since the beginning of 2017, continuing the conservative provisioning policy, [and] restructuring the drug distribution unit,” Albilad Capital added.
Accordingly, net profit margins shrank to 9 percent in the second quarter, compared to 17.7 percent in Q2 2016.
Gross profit slumped 40.4 percent YoY in Q2 2017, coming in at SAR 50.2 million.
Gross margins also dropped to 23.2 percent in Q2, from 32.4 percent in the same period of 2016.
Albilad Capital said it has revised future estimates and profit margins in light of the continuity of low results and the drop in profit margins in H1 2017.
The brokerage remained “neutral” on the stock but lowered its target price to SAR 45 from SAR 51.
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