Budget Saudi’s Q1 2020 results exceed expectations: Aljazira Cap

United International Transportation Co.’s (Budget Saudi) first quarter (Q1) 2020 net profit of SAR 45.5 million came above estimates of SAR 34.9 million, Aljazira Capital said in a research note.

The brokerage firm attributed the company’s results to revenue growth of 6.7% year-on-year, driven by increased sale of used vehicles, partly offset by the provision of SAR 8.9 million for bad debts during the quarter.

Going forward, Aljazira Cap expects provisions for loss of trade receivables to increase, particularly in the corporate leasing segment, adversely affecting net profit.

The firm maintained its “Neutral” recommendation, lowering the target price per share to SAR 27.20 from SAR 36.40.