Riyadh – Mubasher: Profits of Saudi company Advanced Petrochemical in the fourth quarter of 2016 exceeded Alistithmar Capital’s estimates owing to higher sales, which were likely due to improved production capacity rather than sales from present inventories, a new report showed.
These results highlight the Saudi-listed firm’s ability in confronting the rise in prices as well as its ability to market its products well, the research firm said on Sunday.
The petrochemical company’s profits jumped 43.76% year-on-year to SAR 210 million ($56 million) in the fourth quarter of 2016 from SAR 146.08 million ($38.955 million).
Advanced Petrochemical said that the increase was mainly attributable to a rise in its sales and prices, added to profit on equity investment in SK Advanced Co. Ltd. (associated company).
Over the twelve-month period, net profits rose 2.52% year-over-year to SAR 731 million from SAR 713.03 million.
The company is expected to suffer significant pressure on the prices of its products which have not seen a major increase, Alistithmar Capital noted, adding that it forecasted a possible increase in supply.
The research firm set the price target (PT) of Advanced Petrochemical at SAR 47, up 0.53% from the company’s closing price of SAR 46.75 on Thursday, with a “neutral” outlook.
The company’s profits are forecasted to grow by 6% next year, while gross profits are set to increase by 4%, Alistithmar added, noting that it expects dividends to rise to SAR 0.75 per quarter or around SAR 3 per year.
