Riyadh – Mubasher: National Industrialisation Co. (Tasnee) posted "strong" results in the second quarter of 2016, with net income of SAR 103.9 million, higher than NCB Capital's estimate of SAR 32.4 million, according to a new report.
“Tansee returned to profitability after five consecutive quarterly losses. We believe the deviation is mainly due to higher than expected gross margins and higher other income,” the report said.
Revenues reached SAR 3.8 billion, in-line with NCBC expectations.
Operating expenses shed 0.11% year-on-year to SAR 500.5 million in Q2-16 from SAR 563 million, due to one-off impairment charges related to Cristal Global in Q2-15.
The industrial company's expenses were higher than NCBC’s estimates of SAR 490.2 million.
Gross margin stood at 22.2% in Q2-16, the highest since Q2-14 owing to improvement in both petrochemical and industrial segments, and above NCBC's estimate of 20.2%.
NCB Capital remained “Neutral” on Tasnee’s stock with a price target of SAR 12.
“Despite Q2-16 positive surprise, operational issues at new facilities, weak TiO2 outlook and high debt levels are key risks,” the report added.
