Yansab reported weaker than expected Q3 2019 results with a net income of SAR 212 million, which is below NCB Capital and consensus estimates of SAR 275 million and SAR 305 million, respectively.

 

The brokerage firm said in a research note that although revenues were broadly in-line with estimates, the weakness is mainly attributed to lower than expected margins on higher production costs.

 

“Gross margin came in at 20.8 percent in Q3 2019, the lowest level on record,” the note said.

 

NCBC noted that it remains cautious on the stock as weakness in product prices is expected to more than offset the impact of improved efficiency.

 

The brokerage firm is “Neutral” over the share, and set a target price of SAR 74 per share.

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