Riyadh – Mubasher: Saudi Fransi Capital said, in a report issued Monday, that SABIC’s earnings for the fourth quarter of 2015 missed its forecasts by 16% and consensus estimate by 17%.
Saudi Arabia’s giant petrochemical producer SABIC posted on Sunday a 29% decline in net profit to SAR 3 billion for the fourth quarter of 2015, down from SAR 4.3 billion in the prior-year period.
The company’s earnings for the fiscal year 2015 also fell by 20% to SAR 18.8 billion, from SAR 23.3 billion a year earlier.
The drop in net income for the fourth quarter and the full year was ascribed to a decrease in average product prices, as well as a plunge in sale prices in the metal segment.
Moreover, SABIC incurred SAR 375 million from the SAR 781 million registered by Ibn Rushd, a subsidiary, as loss impairment for machinery.
The report issuer said, given the 44% forecasted earnings decline (from a lower product price environment coupled with feedstock/electricity repricing) in 2016, SABIC’s stock is expected to come under pressure in the coming quarters.
“In all, following our earnings revision we have cut SABIC’s target price to SAR72/share (from SAR105) and changed our rating to Hold (from Buy),” it added.
