Riyadh-Mubasher: Al Rajhi Capital stated that Southern Province Cement posted a strong set of results for Q4-15, with net profits at SAR 298 million, coming in ahead of its and consensus estimates of SAR 263 million and SAR 257 million, respectively.
“The strong results came on the back of increased volumes and lesser use of imported clinker, which in turn led to lower cost of goods sold,” the research firm said.
The company’s top-line continued to grow at a healthy rate, driven by new expansion and stable cement prices in the company’s areas of operation.
“Going forward, we expect margins to contract as a result of the government’s subsidy reforms,” Al Rajhi Capital said.
Nevertheless, Southern Province is one of Al Rajhi Capital’s top picks in the cement sector.
The research firm maintained its ‘Overweight’ rating, with a revised target price of SAR78.
