Riyad Cap issues Q1 forecasts for cement companies

Riyad Capital has issued its Q1 2018 earnings forecasts and recommendations for five Tadawul-listed cement companies under its coverage.

Southern Province Cement Co. is expected to post a 29 percent year-on-year (YoY) profit decline while Saudi Cement Co. is seen to report a 9 percent drop YoY.

Yamama Cement, Yanbu Cement and Qassim Cement are also expected to report a net profit decrease during Q1 by 33 percent, 5 percent and 9 percent, respectively.

The firm said that it expects the Saudi cement sector to witness some signs of recovery staring from Q2 2018.

However, the impact of value added tax (VAT), high prices of services, transport costs, rising expatriate fees and the seasonal impact of Q2 should be considered.

Riyad Capital maintained its recommendations and target prices on cement producers but said that some companies might be revised after announcing Q1 financial results.