Rabigh Refining and Petrochemical Co.’s (Petro Rabigh) reported an “impressive” net profit of SAR 641 million for Q4, on the back of higher gross margins reaching 9.4 percent from 6.2 percent a year earlier, Riyad Capital said in an earnings review.
Revenues rose 23 percent year-on-year (YoY) and 7 percent quarter-on-quarter (QoQ) to SAR 9.5 billion, due to higher product prices and an increase in sales volume.
“In addition, stability of production processes and continued improvement in operational performance led to higher production and improvement in yields, despite the shutdown in the vacuum gas oil hydro treating unit (VGO),” the report said.
Net margins stood at 6.7 percent in Q4, compared to 2.4 percent last year.
On a yearly basis, revenues increased by 36 percent YoY to SAR 34 billion for fiscal year 2017, while gross margins more than doubled compared to 2016.
Net profit significantly increased in 2017 to SAR 1.4 billion.
“With Petro Rabigh II coming online, we expect better numbers YoY going forward, although we would caution given earnings volatility historically,” Riyad Capital noted.
The research firm said it would wait for management feedback before firming up projections.
“For the time being, we are placing the stock Under Review and withdrawing our target price,” the report said.
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