Riyadh – Mubasher: Albilad Capital recommended "Neutral" on Advanced Petrochemical Company, setting the fair value at SAR 46.
The company's profits hiked 43.76% year-on-year to SAR 210 million in the fourth quarter of 2016 from SAR 146.08 million.
Over the twelve-month period of the year, net profits rose 2.52% year-over-year to SAR 731 million from SAR 713.03 million.
Operational profit grew 24.92% to SAR 185 million in Q4-16 from SAR 148.1 million in the year-ago period.
The petrochemical firm’s sales stood at SAR 576.4 million in Q4, with a 6.4% increase year-on-year, to conclude the year with sales of SAR 2,139.4 million, declining 10% compared to the same period last year.
The average propane price fell 1.3% year-on-year in Q4-16, while polypropylene prices increased 12.3% year-on-year.
The polypropylene - propane price spread increased in Q4 2016 to $734, which is the reason of the gross margin improvement, the research firm said.
"The fourth quarter’s net earnings came in line with our estimate of SAR 197 million and above analysts’ consensus of SAR 190.4 million," the report stated.
Albilad Capital attributed the rise in the company's profits to hiking volume sales and polypropylene prices stabilisation, in addition to the investment in SK Advanced Limited in South Korea, which amounted to SAR 24.9 million, in line with the estimate of SAR 23.5 million.
