Al Rajhi Cap says Almarai’s Q1 2021 profit beats estimates, maintains ‘Neutral’

Almarai Co. headquarters

Almarai Co.’s Q1 2021 net profit of SAR 385.9 million surpassed Al Rajhi Capital’s estimate of SAR 315 million.

The higher profit was driven by lower financing expense, which fell by SAR36.1 million, due to decline in Saudi Arabian Interbank Offered Rate Benchmark (SAIBOR) and debt levels on the back of the ongoing deleveraging program, Al Rajhi Capital said in a recent report.

The brokerage expects an exodus of expatriates, reduced pocket size of Saudi consumers due to higher value-added tax (VAT) and delay in school re-opening to impact segment growth in the Kingdom.

However, export markets, especially Egypt and Jordan, are likely to continue delivering strong growth.

Meanwhile, Almarai is estimated to report a net profit of SAR 2.11 billion in 2021 and SAR 2.24 billion in 2022.

Al Rajhi Capital maintained a “Neutral” recommendation towards the stock, keeping the target price at SAR 55 per share.