Saudi Cement Co.’s net profit of SAR 125 million in Q4 2018 was higher than Al Rajhi Capital's estimates of SAR 82 million, the brokerage said in an earnings report on Tuesday.
Revenue came in at SAR 304 million beating the brokerage and consensus estimates of SAR 270 million and SAR 295 million, respectively, driven by higher-than-expected sales volume and better-realized cement prices.
The company's exports rose 29 percent quarter-on-quarter as operating margins jumped to 41 percent in Q4 from 34 percent in Q3, on account of higher top-line coupled with better cost efficiencies. The cement manufacturer’s market share increased to 12.8 percent, despite challenging market conditions, the report said.
"Going forward, we expect average cement prices to remain firm, despite anticipated weak demand in 2019. The company is likely to improve its market share further, on the back of higher sales volume," the brokerage added.
Al Rajhi Capital maintained its "underweight" rating on the stock, revising the target price to SAR 47 per share.
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