Riyadh – Mubasher: AlJazira Capital said that Southern Province Cement's fourth quarter results came below expectations due to lower than expected volumetric sales and higher operating expenses by 31.3% year-on-year.
The research firm updated its recommendation on the company to "Neutral" with lower target price (TP) of SAR 69 per share.
AlJazira Capital expected that the cement company would lower its cash dividends for the second half of 2016 to SAR 2.5 per share from SAR 3.5 per share.
"Based on our estimate, the company is trading at forward P/E and P/B of 12.6x and 2.94x respectively for FY2017," the report said.
The Saudi-listed company is likely to post net profit of SAR 825 million for 2017, with a decline of 6.3% year-on-year, influenced by lower sales volume and weak selling prices, the research firm added.
Southern Cement’s profits declined 48% year-on-year to SAR 156 million in the fourth quarter of 2016 from SAR 300 million.
