SIIG’s Q3 net profit beats estimates, says Riyad Capital

Saudi Industrial Investment Group’s (SIIG) Q3 net profit of SAR 226 million beat Riyad Capital’s estimate by 9 percent but came in-line with the consensus estimate, the brokerage said in an earnings review.

Revenue, however, met the firm’s expectations but misses consensus estimates by 7 percent.

Gross profit of SAR 552 million came in-line with Riyad Capital’s estimate of SAR 527 million.

Factors driving the deviation in net profit were increased profit from Petrochem and Saudi Chevron Phillips (SCP), which swung from a loss of SAR 18 million in Q2 2017 to a profit of SAR 77 million last quarter.

Margins of associates also increased sharply, and on a quarter-on-quarter (QoQ) basis, stable prices of polypropylene and polyethylene, an 8 percent rally in styrene, and less volatility in benzene and cyclohexane drove topline stability for associates and Petrochem.

Riyad Capital revised its recommendation on SIIG’s stock to ‘neutral’ but maintained a target price of SAR 21 per share.

Last week, SIIG Saudi Industrial Investment Group’s (SIIG) 9M net profit surged to SAR 606 million on the back of an increase in its share of projects that it manages jointly with SCP and JCP, a drop in financing payments to its subsidiary Petrochemical Conversion Co. (PCC), and increase in other income.