Albilad Cap issues Q1 profit estimates; SABIC seen up 50%

Albilad Capital on Wednesday issued its first quarter 2017 earnings estimates for Saudi-listed companies under its coverage.

Total profit of the banking sector is expected to see only a slight growth of 2.6 percent year-on-year (YoY), as growth of deposits and loans in Q1 slowed down.

Al Rajhi Bank is expected to see a 6 percent YoY rise in profit for Q1, while Aljazira Bank’s earnings will likely drop by 63 percent YoY.

Petrochemical prices have marginally improved in Q1 compared to the previous quarter due to higher oil prices. Meanwhile, fertilizer prices spiked compared to the previous and corresponding quarters.

Saudi Basic Industries Corp’s (SABIC) net profit is expected to jump 50 percent YoY to around SAR 5.1 billion in Q1 2017.

The telecommunications sector will likely see lower revenue.

“As higher tariffs were applied in Q1 2016, the top line is awaited to tumble in Q1 2017 especially for STC and Mobily. The results will also reflect the slowdown in telecom market,” the report said.

Meanwhile, Mobily and Zain is likely to benefit in Q1 from reduced license amortization charges following the extension of their licenses in Q3 2016.

Cement companies are expected to experience a 22 percent YoY drop in sales to about 13.3 million tons in Q1 2017, as sales fell 20 percent in January and February to 8.9 million tons due to lower demand compared to 2016, while clinker inventory reached a record-high 28.8 million tons by Feb. 2017.

The retail sector is expected to suffer in Q1 due to government decisions in H2 2016 to curb financial benefits for state employees, in addition to the planned fees for expat families.