Arabian Cement’s results for Q3 2019 beat estimates: Aljazira Capital

Arabian Cement Co.’s net profit of SAR 60.6 million came higher than estimates set by Aljazira Capital of SAR 43.1 million, the brokerage firm said in a report.

“Revenue stood at SAR 193.5 million, above our estimates of SAR 183.5 million, showing an increase of 64.2% YoY, due to increase in sales volume and a strong contribution from Qutranah cement”, the report added.

The company’s sales volumes will gradually increase over the coming quarters given the mega projects in the Western Region, as well as improved performance from Qatrana.

The company is expected to sustain the current price realization for FY19, the firm added.

Cement sector has recovered from its current downtrend due to producer’s concentration on selling prices and an increase in export sales for the first 10 months of 2019.

Arabian cement is expected to post SAR 212.3 million in net profit with earnings per share of SAR 212 for FY 19.

The company is expected to report strong financial cash flows, which increases the possibility of higher dividend per share at SAR 1.75/share during FY19, resulting in a dividend yield of 5.4%.

Aljazira capital maintained its “Overweight” recommendation on the stock and lifted the target price to SAR 35.70/share from SAR 31.70.