Yansab’s Q3 net profit misses forecast, says Riyad Cap

Yanbu National Petrochemical Company’s (Yansab) net profit of SAR 212 million in Q3 2019 fell short of Riyad Capital and analysts’ estimates of SAR 305 million.

Higher production costs largely impacted the third quarter bottom line, Riyad Capital said in an earnings note.

“Despite the company’s strong balance sheet and cash balance, the big contraction in margins is disconcerting,” the brokerage firm further added.

The stock’s rich premium could be pressured if margins do not recover to their normal levels.

Riyad Capital affirmed its “neutral” rating on the stock, but lowered its target price to SAR 57 per share from SAR 65.