Itqan Capital says Aldrees Q4 2020 results ‘good’, maintains ‘overweight’ rating

Aldrees Petroleum and Transport Services Co. (Aldrees) posted good financial results for the fourth quarter of 2020, Itqan Capital said in a new report.

However, the results are not comparable to Q4 2019 due to the retrospective adjustment of the impact of petrol margins during that quarter, making it an exceptionally high base.

The Tadawul-listed firm posted a net profit of SAR 39.5 million for Q4 2020, a rise of 83%, compared with the same period last year, according to data compiled by Argaam.

The petrol segment is expected to report continued recovery and growth in 2021, driven by the strong expansion plan and recovery of the transport, Itqan Capital said.

"We see downside risks from intensified competition as the Saudi market becomes attractive for expansion for the large regional players and slow recovery in the transport segment on the back of economic slowdown," it noted.

The brokerage maintained its “Overweight” recommendation for Aldrees, setting the 52-weeks target price at SAR 73.50.