Petrochem’s Q1 profit matches estimate, says Riyad Cap

National Petrochemical Co.’s (Petrochem) net profit of SAR 168 million came in-line with Riyad Capital’s estimate of SAR 171 million, the brokerage said in an earnings review.

Revenue stood at SAR 1.63 billion, matching the forecast of SAR 1.68 billion.

“Despite a 60-day shutdown in Q4 2016, Petrochem managed a comeback in this quarter with a robust set of numbers, higher than Q1 2016,” the brokerage firm added.

Net margins expanded by 260 basis points year-on-year with a similar increase relative to other margins, but came lower when compared to Q2 and Q3 2016 on the back of higher feedstock prices.

The petrochemical producer is expected to post a net profit of SAR 727 million and SAR 747 million for 2017 and 2018, respectively.

The brokerage firm maintained its “neutral” rating on the stock with a target price of SAR 19, adding that dividend payouts and earnings sustainability could trigger a rerating.