Yanbu Cement’s Q3 2019 results beat estimates: Al Rajhi Capital

Yanbu Cement Co.’s net profit of SAR 61 million for Q3 2019 outperformed estimates set by Al Rajhi Capital and average market estimates of SAR 49 million and SAR 53 million respectively, Al Rajhi Capital said in a report.

The company is expected to focus on local sales to regain its market share, maintain high selling margins, and benefit from the growing local demand, the report added.

“The key downside risks are on further decline in exports. The key upside risks are higher than expected market share and forecasted pick up in government’s infrastructure spending,” the firm added.

Domestic cement demand is forecasted to be recovering gradually, but on a slower rate, however, local cement producers will continue to maintain the current high level of prices in future, the brokerage firm also said.

Al Rajhi Capital has upgraded its recommendation on Yanbu Cement to “Neutral” from “Underweight” and lifted the per share target price to SAR 34 from SAR 30.