Riyadh - Mubasher: Al Rajhi Capital attributed Saudi Airlines Catering Company’s (SACC) profit decline in the second quarter of 2016 to higher base of Q2-15, which was boosted by write back of provision for restructuring.
SACC reported a net profit of SAR 145 million ($38.66 million) in Q2-16, down 17.5% year-on-year.
Revenues remained flat due to continuing weak performance of in-flight catering offset by the retail and business lounge divisions, the investment firm added in its newest report on the stock.
Al Rajhi expects the demand for in-flight catering meals to remain weak, however revenue growth will be supported by retail and business lounge segments led by higher business and religious tourists.
“We have revised our estimates, based on which we arrive at a target price of SAR100, and continue to rate the SACC stock as Neutral,” the report stated.
