Sahara’s Q4 net income highest since 2014, says NBC Capital

Sahara Petrochemicals Co.’s (Sahara) Q4 net income of SAR 160 million, which was compared to a loss of SAR 48 million year-on-year, was its highest quarterly net income since Q2-2014, NCB Capital (NCBC) said in an earnings report.

Sahara’s Q4 net income increased 52 percent quarter-on-quarter, topping NCBC’s estimates of SAR 103 million and the consensus of SAR 106 million. 

“We believe the higher than expected earnings from associates and higher sales from Alwaha were the main reasons behind the variance,” NCBC said.

The company’s revenues stood at SAR 528 million for the fourth quarter, a 22 percent growth YoY, marking the highest operating rates since inception.

Gross margins came in at 28 percent, in-line with the same quarter in 2015 but lower than estimates of 30.6 percent.

“Petrochemical prices increased 2-8% QoQ and 2-12% YoY. PP-Propane (Aramco) spreads declined 2.0% QoQ to $685,” the report said.

Income from associates stood at SAR 113 million, beating estimates of SAR 57 million, which is the highest income from associates since Q2-2014.

“We believe it is attributed to higher income from SEPC and lower losses at SAMAPCO and the acrylic facility, benefiting from improved efficiency and higher product prices,” the report said.

NCBC maintained its “neutral” rating on Sahara’s stock with a target price of SAR 9.9 per share.