Yamama Cement’s Q3 2019 profit misses estimates: Al Rajhi Cap

Yamama Cement Co.’s Q3 2019 net profit of SAR 55 million fell shy of Al Rajhi Capital’s estimate of SAR 61 million and consensus analysts’ expectations of SAR 60 million, the brokerage firm said in a recent earnings note.

Al Rajhi Capital attributed the reason to higher production costs, lower than expected quantities sold and higher tax provision.

The cement producer is forecast to maintain the current level of selling prices and partially recover the lost market share, being well positioned to serve public and private projects in Riyadh and the central region.

The major upsides are higher than anticipated cement sales quantities and higher than forecasted government’s infrastructure spending pick up.

“However, upcoming relocation of its manufacturing facilities, accumulating inventory and higher capex requirements are a few challenges for the company in the near future,” Al Rajhi Capital added.

The report issuer added that it maintained “neutral” on Yamama Cement’s stock, upping its target price to SAR 22 from SAR 19.