By: Thabet Shehata
Riyadh – Mubasher: AlJazira Capital expected Saudi Basic Industries Corporation's (SABIC) profits to hike 60.8% year-on-year to SAR 4.94 billion in the fourth quarter of 2016.
The high expectations are attributed to some unrepeated negative impacts happened in the same quarter of 2015, adding to positive factors appeared in this quarter, Jassim Aljubran, analyst at Aljazira Capital, told Mubasher.
He added that the unrepeated negative impacts are represented in the sharp decline in selling the products of the steel sector achieving losses by SAR 1.1 billion, adding to the decrease in loss provision of the value of Ibn Rushd company's equipment and machinery by SAR 781 million, while SABIC's share is SAR 375 million.
Aljubran noted that SABIC saw a notable enhancement in the final products' selling prices in the current quarter compared to the year-ago period, along with higher selling margins of the company.
AlJazira Capital also expected that the Saudi petrochemical sector would see a big rise in the fourth quarter of 2016, compared to the prior-year period.
Higher selling prices and volume would lead to offsetting the impact of lower selling margin in the current quarter compared to the last one, according to its report.
The report also showed the research firm's estimates for Sipchem Chemicals Company to post SAR 71.3 million profits in Q4, with a 174.5% surge year-on-year, reasoning that to a rebound in the methanol prices, which is expected to slightly offset the impact of lower operating rate.
Translated by: Sara Ghali
