Riyadh – Mubasher: Albilad Capital said in a report issued Thursday it placed an “Overweight” rating for Yanbu Cement, lowering the stock fair value to SAR 58.20 from SAR 63.10, to reflect expected decline in the company’s sales this year.
YCC released its interim financial results for Q1 2016 unveiling bottom line of SAR 184 million, edging down 11.1% YoY and 12% QoQ. The earnings figures came in line with our estimate of SAR 187 million and the analyst consensus of SAR 189 million. YCC attributed the net profit slump to lower sales volumes and value as well as the rise of fuel prices.
The company announced cash dividends SAR 551.25 million (SAR 3.5 per share) for the second half of 2015, thus the total payment for the full year amounted to SAR 787.5 million for 2015 (SAR 5 per share).
“We believe that the revision of government spending policies to weigh on the demand for cement this year. The government is expected to lift the ban on cement export, while subjecting cement producers to a minimum level of clinker inventory to maintain local prices at the current levels. This may restrain the increase of clinker inventory especially for companies are close to export markets,” said the report issuer.
