Yansab’s Q2 beat estimates on higher operating rates: NCBC

Yanbu National Petrochemical Co. (Yansab) reported better-than-expected financial results for Q2 2018, with net income of SAR 821 million beating NCB Capital's estimate of SAR 602 million, but staying broadly in-line with the consensus estimates of SAR 764 million.

The better than expected results were mainly due to higher operating rates and improved operating efficiency, the brokerage said in an earnings review.

Revenues, which came in at SAR 2.1 billion, 18.3 percent higher NCB Capital’s estimate. Operating rates stood at 92 percent versus an estimated rate of 78 percent.

Gross margin stood at 44.4 percent which was slightly higher than the NCB’s estimates of 41.7 percent.

PP prices increased  23.4 percent year-on-year (YoY) to $1,236, while HDPE prices were up 21.9 percent YoY to $1,353. EG prices jumped 31.9 percent YoY to $979, while PP-propane spread was up 31.7 percent YoY to $751.

NCB Capital maintained its recommendation of “overweight” on the stock with a target price of SAR 80.20.