Saudi Cement’s Q2 profit misses estimates, says Aljazira Cap

Saudi Cement Co.’s (SCC) Q2 2018 net profit of SAR 58 million fell shy of Aljazira Capital and consensus’ forecasts of SAR 86.8 million and SAR 113.9 million, respectively.

“The bottom line was impacted by higher than expected OPEX and finance expenses,” the brokerage firm said in an earnings note on Tuesday.

Meanwhile, the cement producer’s SAR 245.8 million revenue came in line with Aljzaira Capital’s forecasts of SAR 250.1 million, despite the lower than expected price realization.

Price realization is expected to remain under pressure due to high competitive environment, the report said.

The second-quarter gross profit margin dropped by 586 basis points amid low selling prices, despite the lower than expected cost per ton.

SCC’s cost per ton is expected to stand at SAR 121.7/ton, compared to SAR 123.3/ton in Q2 2017. For the full year, cost per ton is likely to average at SAR 121.0/ton.

The company is projected to pay cash dividend of SAR 1.0 per share in H2 2018, after cutting its dividend to SAR 1.5 per share in the first half of the year.

Aljazira Capital added that it remained “neutral” on the stock, with a target price of SAR 47.3.