Eastern Cement’s H1 net profit falls 23% to SAR 137 mln

27/07/2016 Argaam Exclusive

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Eastern Province Cement Co. (EPCCO)

 

Eastern Province Cement Co. reported a net profit of SAR 137 million for the first half of 2016, a 23 percent year-on-year (YoY) decline attributed to lower sales driven by less demand and higher production costs resulting from increased energy prices.

 

An inventory spare parts provision recorded during this period, lower other income and investment income, and higher other expenses also drove the decline in net profit.



Financials (M)

Item 6m 2015 6m 2016 Change‬
Revenues 508.62 452.82 (11.0 %)
Gross Income 216.45 161.85 (25.2 %)
Operating Income 181.85 126.08 (30.7 %)
Net Income 177.71 133.50 (24.9 %)
Average Shares 86.00 86.00 -
EPS (Riyals) 2.07 1.55 (24.9 %)

The company’s second quarter net profit fell 46.2 percent YoY to SAR 50 million. When compared to the previous quarter, the period’s net profit declined 43.2 percent on lower sales during the Ramadan month, which came in Q2 this year.



Current Quarter Comparison (M)

Compared With The
Item Q2 2015 Q2 2016 Change‬
Revenues 254.15 207.53 (18.3 %)
Gross Income 108.12 66.52 (38.5 %)
Operating Income 91.80 50.47 (45.0 %)
Net Income 92.77 47.33 (49.0 %)
Average Shares 86.00 86.00 -
EPS (Riyals) 1.08 0.55 (49.0 %)


Financial results (Million)

Period Revenues Change Gross Income Change Net Income Change EPS(Riyal)
Q1 2007 225.28 32.4 % 141.38 34.5 % 132.94 32.0 % 1.55
Q2 2007 266.12 32.8 % 164.63 30.7 % 162.80 40.9 % 1.89
Q3 2007 213.91 5.4 % 136.66 8.2 % 134.24 12.7 % 1.56
Q4 2007 218.64 9.9 % 122.12 6.1 % 111.45 1.2 % 1.30
Q1 2008 248.66 10.4 % 149.57 5.8 % 155.04 16.6 % 1.80
Q2 2008 234.60 (11.8 %) 143.44 (12.9 %) 141.66 (13.0 %) 1.65
Q3 2008 146.60 (31.5 %) 80.02 (41.4 %) 62.75 (53.3 %) 0.73
Q4 2008 168.97 (22.7 %) 90.28 (26.1 %) 74.79 (32.9 %) 0.87
Q1 2009 193.25 (22.3 %) 106.81 (28.6 %) 96.96 (37.5 %) 1.13
Q2 2009 206.64 (11.9 %) 115.51 (19.5 %) 103.09 (27.2 %) 1.20
Q3 2009 186.31 27.1 % 107.96 34.9 % 100.60 60.3 % 1.17
Q4 2009 192.37 13.8 % 71.85 (20.4 %) 50.05 (33.1 %) 0.58
Q1 2010 210.23 8.8 % 105.93 (0.8 %) 92.20 (4.9 %) 1.07
Q2 2010 231.56 12.1 % 106.39 (7.9 %) 104.28 1.2 % 1.21
Q3 2010 171.41 (8.0 %) 80.43 (25.5 %) 63.59 (36.8 %) 0.74
Q4 2010 206.26 7.2 % 94.92 32.1 % 82.91 65.6 % 0.96
Q1 2011 210.50 0.1 % 98.33 (7.2 %) 82.55 (10.5 %) 0.96
Q2 2011 214.92 (7.2 %) 109.21 2.6 % 101.05 (3.1 %) 1.17
Q3 2011 170.72 (0.4 %) 93.80 16.6 % 74.71 17.5 % 0.87
Q4 2011 216.43 4.9 % 117.35 23.6 % 105.64 27.4 % 1.23
Q1 2012 238.21 13.2 % 123.60 25.7 % 104.06 26.1 % 1.21
Q2 2012 212.79 (1.0 %) 108.86 (0.3 %) 103.18 2.1 % 1.20
Q3 2012 175.09 2.6 % 89.50 (4.6 %) 83.78 12.1 % 0.97
Q4 2012 228.79 5.7 % 98.73 (15.9 %) 95.64 (9.5 %) 1.11
Q1 2013 237.85 (0.2 %) 114.81 (7.1 %) 109.45 5.2 % 1.27
Q2 2013 203.39 (4.4 %) 80.49 (26.1 %) 77.42 (25.0 %) 0.90
Q3 2013 174.92 (0.1 %) 79.00 (11.7 %) 67.65 (19.2 %) 0.79
Q4 2013 212.57 (7.1 %) 74.04 (25.0 %) 54.63 (42.9 %) 0.64
Q1 2014 214.60 (9.8 %) 92.28 (19.6 %) 156.73 43.2 % 1.82
Q2 2014 217.73 7.1 % 94.15 17.0 % 81.64 5.4 % 0.95
Q3 2014 193.08 10.4 % 73.56 (6.9 %) 55.94 (17.3 %) 0.65
Q4 2014 219.70 3.4 % 92.72 25.2 % 79.25 45.0 % 0.92
Q1 2015 254.48 18.6 % 108.33 17.4 % 84.94 (45.8 %) 0.99
Q2 2015 254.15 16.7 % 108.12 14.8 % 92.77 13.6 % 1.08
Q3 2015 192.12 (0.5 %) 82.94 12.8 % 66.73 19.3 % 0.78
Q4 2015 239.22 8.9 % 94.51 1.9 % 87.86 10.9 % 1.02
Q1 2016 245.29 (3.6 %) 95.34 (12.0 %) 86.18 1.5 % 1.00
Q2 2016 207.53 (18.3 %) 66.52 (38.5 %) 47.33 (49.0 %) 0.55

Profitability

Period Gross Margin OIBDA Margin Net Margin Before Unusual Items
Q1 2007 61.46 % 65.51 % 57.72 %
Q2 2007 61.28 % 65.18 % 58.77 %
Q3 2007 61.68 % 65.79 % 59.73 %
Q4 2007 61.13 % 65.28 % 58.60 %
Q1 2008 60.48 % 65.10 % 59.49 %
Q2 2008 60.25 % 65.64 % 59.22 %
Q3 2008 58.36 % 64.23 % 55.50 %
Q4 2008 58.00 % 64.22 % 54.36 %
Q1 2009 56.57 % 61.97 % 50.60 %
Q2 2009 54.88 % 60.94 % 47.18 %
Q3 2009 55.69 % 62.02 % 49.71 %
Q4 2009 51.65 % 57.62 % 45.04 %
Q1 2010 50.44 % 57.67 % 43.48 %
Q2 2010 47.79 % 54.40 % 42.31 %
Q3 2010 45.26 % 52.03 % 38.50 %
Q4 2010 47.31 % 54.30 % 41.85 %
Q1 2011 46.36 % 53.20 % 40.66 %
Q2 2011 47.68 % 55.18 % 41.10 %
Q3 2011 49.38 % 57.07 % 42.53 %
Q4 2011 51.53 % 58.79 % 44.79 %
Q1 2012 52.83 % 59.64 % 45.87 %
Q2 2012 52.93 % 59.02 % 46.25 %
Q3 2012 52.14 % 57.68 % 47.08 %
Q4 2012 49.21 % 54.65 % 45.69 %
Q1 2013 48.20 % 53.88 % 46.34 %
Q2 2013 45.38 % 50.46 % 43.81 %
Q3 2013 44.15 % 49.61 % 41.91 %
Q4 2013 42.03 % 47.15 % 37.31 %
Q1 2014 40.45 % 45.79 % 34.23 %
Q2 2014 41.41 % 48.07 % 34.15 %
Q3 2014 39.86 % 46.57 % 32.01 %
Q4 2014 41.73 % 50.17 % 34.65 %
Q1 2015 41.67 % 49.66 % 34.10 %
Q2 2015 41.54 % 48.96 % 33.96 %
Q3 2015 42.60 % 49.96 % 35.17 %
Q4 2015 41.91 % 48.80 % 35.16 %
Q1 2016 40.92 % 47.21 % 35.64 %
Q2 2016 38.38 % 45.38 % 32.38 %


Per Share Data (Riyal)

Compared With The
Period Shares Outstanding (M) EPS (Riyal) Adjusted EPS (Riyal) Book Value (BV)
Q1 2007 86.00 5.56 5.56 18.80
Q2 2007 86.00 6.10 6.10 20.77
Q3 2007 86.00 6.28 6.28 22.45
Q4 2007 86.00 6.30 6.30 24.58
Q1 2008 86.00 6.55 6.55 19.92
Q2 2008 86.00 6.31 6.31 21.96
Q3 2008 86.00 5.48 5.48 21.83
Q4 2008 86.00 5.05 5.05 21.79
Q1 2009 86.00 4.37 4.37 20.05
Q2 2009 86.00 3.93 3.93 21.67
Q3 2009 86.00 4.37 4.37 23.10
Q4 2009 86.00 4.08 4.08 23.58
Q1 2010 86.00 4.02 4.02 21.66
Q2 2010 86.00 4.04 4.04 22.59
Q3 2010 86.00 3.61 3.61 23.40
Q4 2010 86.00 3.99 3.99 24.55
Q1 2011 86.00 3.88 3.88 22.10
Q2 2011 86.00 3.84 3.84 23.27
Q3 2011 86.00 3.97 3.97 23.91
Q4 2011 86.00 4.23 4.23 25.09
Q1 2012 86.00 4.48 4.48 23.16
Q2 2012 86.00 4.51 4.51 24.09
Q3 2012 86.00 4.61 4.61 25.22
Q4 2012 86.00 4.50 4.54 26.35
Q1 2013 86.00 4.56 4.60 23.66
Q2 2013 86.00 4.26 4.30 24.74
Q3 2013 86.00 4.07 4.12 25.56
Q4 2013 86.00 3.59 3.59 26.55
Q1 2014 86.00 4.14 3.21 24.03
Q2 2014 86.00 4.19 3.26 25.04
Q3 2014 86.00 4.06 3.12 25.79
Q4 2014 86.00 4.34 3.41 26.29
Q1 2015 86.00 3.51 3.51 24.72
Q2 2015 86.00 3.64 3.64 25.89
Q3 2015 86.00 3.76 3.76 26.43
Q4 2015 86.00 3.86 3.84 27.35
Q1 2016 86.00 3.88 3.86 25.81
Q2 2016 86.00 3.35 3.33 26.42

Multiple Ratios (End of Period Price)

Compared With The
Period P/E Adjusted P/E Price/book
Q1 2007 11.57 11.57 3.42
Q2 2007 11.30 11.30 3.32
Q3 2007 12.10 12.10 3.39
Q4 2007 14.14 14.14 3.62
Q1 2008 12.67 12.67 4.17
Q2 2008 12.57 12.57 3.61
Q3 2008 11.19 11.19 2.81
Q4 2008 7.92 7.92 1.84
Q1 2009 9.76 9.76 2.13
Q2 2009 11.31 11.31 2.05
Q3 2009 10.45 10.45 1.97
Q4 2009 12.21 12.21 2.11
Q1 2010 12.43 12.43 2.31
Q2 2010 10.70 10.70 1.91
Q3 2010 12.45 12.45 1.92
Q4 2010 11.36 11.36 1.85
Q1 2011 12.05 12.05 2.11
Q2 2011 12.90 12.90 2.13
Q3 2011 12.07 12.07 2.00
Q4 2011 13.11 13.11 2.21
Q1 2012 13.16 13.16 2.55
Q2 2012 11.76 11.76 2.20
Q3 2012 11.27 11.27 2.06
Q4 2012 12.79 12.66 2.18
Q1 2013 12.34 12.22 2.38
Q2 2013 13.79 13.65 2.37
Q3 2013 14.12 13.97 2.25
Q4 2013 16.55 16.55 2.24
Q1 2014 13.87 17.93 2.39
Q2 2014 14.37 18.51 2.41
Q3 2014 15.63 20.33 2.46
Q4 2014 12.74 16.25 2.10
Q1 2015 15.71 15.71 2.23
Q2 2015 12.66 12.66 1.78
Q3 2015 9.94 9.94 1.42
Q4 2015 8.21 8.25 1.16
Q1 2016 8.00 8.05 1.20
Q2 2016 8.97 9.02 1.14

Business Segments (Million)

Compared With The
Period Cement Ready-mixed Concrete Construction support business
Q3 2012 175.08 - -
Q4 2012 152.98 33.66 42.16
Q1 2013 216.34 16.81 4.70
Q2 2013 186.01 12.24 5.14
Q3 2013 155.15 18.27 1.49
Q4 2013 192.22 19.89 0.46
Q1 2014 195.12 2.88 16.61
Q2 2014 196.02 30.34 -
Q3 2014 145.32 43.77 3.99
Q4 2014 188.96 41.70 -
Q1 2015 204.72 48.51 1.25
Q2 2015 195.96 57.46 0.73
Q3 2015 141.41 49.49 1.22
Q4 2015 195.22 41.42 2.58
Q1 2016 191.97 53.32 -
Q2 2016 153.40 54.13 -

Analysts Estimates (Million)

Item Q2 2016 (e) Q2 2016 (a) Change‬
Average 78.71 47.33 (39.9 %)

Estimates vs Actual (Million)

Item Q2 2016 (e) Q2 2016 (a) Change
SNB Capital 66.00 47.33 (28.3) %
KASB Capital 79.30 47.33 (40.3) %
AlJazira Capital 79.55 47.33 (40.5) %
SFC 90.00 47.33 (47.4) %

Current
Market Cap (M Riyal) 2,928.30
Enterprise Value (EV) (M) 2,732.90
Shares Outstanding ((M)) 86.00
EPS ( Riyal) (TTM) 2.44
Book Value (BV) ( Riyal) 27.58
Par Value ( Riyal) 10.00
Adjusted P/E (Last12) 12.83
P/E (TTM) 13.95
Price/book 1.23
Return on Average Assets (%) (TTM) 7.2
Return on Average Equity (%) (TTM) 8.9

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