Riyadh – Mubasher: Yanbu National Petrochemicals (Yansab) is likely to distribute cash dividends of SAR2.5 at a yield of 6.1% in 2016, backed by "strong operating cash flow and no additional capital expenditure in the near to medium term", Al-Jazira Capital reported.
The company's cash and cash equivalents stood at SAR3.41 billion by the end of 2015, associated with a decrease in the long-term debt by 36% approximately and in the grace period of feedstock re-pricing, which may lead to higher dividend payout in 2016, the report indicated.
In 2016, the research firm also anticipates Yansab to see an increase in total earnings by 45% to SAR1.75 billion, or SAR3.11 earnings per share, due to the completion of scheduled maintenance throughout 2015.
Al-Jazira assigned "Neutral" recommendation for Yansab's stock, increasing the target price to SAR44.2 per share with an upside potential of 7.8% from the latest closing quote of SAR41 on 13 April.
In the first quarter, Yansab's net profits went up to SAR401.9 million, up 40.9% quarter-on-quarter and 2.2% year-on-year. The company ascribed stronger profitability to lower prices of some raw materials, slow-moving spare parts, and some fixed costs.
But the firm believes that "despite the weak average product prices, the higher than expected product spreads have strongly revived the financial earnings in Q1-16."
