Riyadh-Mubasher: Rising borrowing costs pose a greater earnings risk for Ma'aden as each 1% increase in borrowing rates translates into over SAR 400 million jump in financing costs, Saudi Fransi Capital said in a report.
It added that the continued rise in interest rates will pressure the company in 2016.
Adjusted energy costs will likely have a deeper impact than initial assessment particularly when transportation contracts are revised. Net outcome would fall 19% in 2016 following a disappointing 2015.
The research firm lowered the stock's price target to SAR 28.50 from SAR 32.50, reinstating its 'Hold' recommendation.
The company suffered net losses of SAR 5.6 million in the fourth quarter ended 31 December 2015, against earnings of SAR 376 million in the same period a year ago.
Net earnings for the 12-month period reached SAR 605 million, falling 55% year-on-year from SAR 1.3 billion.
