Mubasher: NCBC Capital set the price target (PT) of Saudi Arabian Fertilisers Company (SAFCO) at SAR 63.4, with a “neutral” recommendation, according to a statement.
SAFCO reported “weak set” of results in the third quarter of 2016, with a net income of SAR 181 million which is the “lowest” on record.
The company’s net income was significantly below the NCBC and consensus estimate of SAR 253 million and SAR 249 million respectively.
Earnings declined 68.0% year-on-year as a result of lower than NCBC and consensus estimate of SAR 253 million and SAR 249 million respectively.
Revenues fell 22.2% year-on-year and 2.8% quarter-on-quarter to reach SAR 690 million in Q3-16, 7.2% higher than NCBC’s estimate of SAR 643 million and is attributed to higher-than-expected operating rates.
Based on NCBC’s calculations, SAFCO's share in Ibn Al-Baytar was SAR 20 million, lower than our estimate of SAR 34 million. The research firm believes that weak fertilizer prices and the preparation for the shutdown in Q3-16 negatively affected Ibn Al-Baytar performance.
NCBC revises its net income estimate for Saudi Basic Industries Corp (SABIC) lower by SAR 12 million to SAR 5.069 million.
