Yansab’s Q1 2020 profit misses estimates: Aljazira Cap

Yanbu National Petrochemical Co. (Yansab) reported a net profit of SAR 104.5 million in Q1 2020, missing Aljazira Capital’s estimate of SAR 151.3 million, the brokerage firm said in a note on Tuesday.

The deviation in the Q1 earnings was attributed to lower-than-expected revenue and higher-than-expected depreciation cost. In addition, the weak performance was driven by decline in average sales prices, weak volumetric sales and demand due to COVID-19 pandemic.

The brokerage firm expects the weak volumetric sale to continue for the next two quarters, impacted by the global slowdown in demand due to COVID-19. However, a slow recovery is expected by the end of FY 2020.

Moreover, naphtha prices will continue to remain under pressure due to oversupply and weak demand.

Yansab is expected to post SAR 929 million in net income for FY 2020.

Aljazira Capital maintained its “Neutral” recommendation on the company’s shares, setting the target price at SAR 48 a share.