Mubasher: MubasherTrade Research (MTR) issued a report on Qatar National Cement Company (QNCC), maintaining its “Buy” recommendation on the stock but trimming its price target by 7.5% from QAR128.5/share (adjusted for the recent 10% stock dividend) to QAR118.9/share.
QNCC reported a 10% YoY surge in 2015 earnings to QAR464 million vs. QAR421 million in 2014, driven mainly by growth in sales volumes. The results came in line with MTRe of QAR454 million (+2.1%) and consensus estimates of QAR458 million (+1.2%).
Earnings from cement segment witnessed a healthy growth of 13.8% YoY to QAR402 million, while profits of the sand segment dipped 31.7% YoY to QAR23.1 million. On a top line level, revenues surged 11.6% YoY to QAR1,171 million in 2015, in line with MTRe of QAR1,193 million (-1.9%) but beating consensus estimates of QAR1,129 million (+3.7%).
Cement segment revenues jumped 9.2% YoY to QAR965 million, below MTRe of QAR1,045 million (-7.7%), capturing 81.6% of the company's total revenues. Gross margin declined to 50% in 2015 (MTRe 52%), lower than the previous year's 56%, on higher costs backed by clinker purchases, based on our calculations. However, net margin remained almost flat YoY at 39.6% (MTRe 38%) compared to 40.1% in 2014.
