Saudi Company for Hardware’s (SACO) Q4 2018 net profit is expected to fall 12 percent year-on-year (YoY), but rise 47 percent quarter-on-quarter (QoQ) to SAR 36 million, Bahrain-based SICO Investment bank said in a recent report.
Sales in Q4 2018 are projected to decline 7 percent YoY, but jump 18 percent QoQ to SAR 400 million, the report said.
“Saudi retailers usually perform well in Q4s, led by end of year purchases and a push through mega sales. Recall, SACO had a major mega sale in Q4 2017, a first since the company’s IPO, whereas in Q4 2018 as well, it has end of year promotions on some selected items,” SICO added.
SACO’s net earnings are likely to reach SAR 95 million by year-end, ahead of rising to SAR 103 million and SAR 131 million in 2019 and 2020, respectively.
SACO is behind its target of launching four stores in 2018 (equivalent to 10 percent growth on retail space). The retailer opened two new stores in 2018 in Al Jouf city and Riyadh.
The company is opening only one more store by Q4 2018 due to contactor delays, the report added.
The investment bank downgraded SACO to “sell”, but raised the stock’s target price to SAR 62 from SAR 58.66.
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