Dallah’s Q4 misses estimates on higher provisions: Al Rajhi Cap

Dallah Healthcare Company’s net profit of SAR 63 million for Q4 2017 fell short of Al Rajhi and consensus estimates of SAR 82 million and SAR 84 million, respectively, the brokerage firm said in its earnings report on Tuesday.

"We believe that higher than expected provisions and losses from sale of investments were the main reasons behind the miss," it added.

Revenue for the quarter stood at SAR 325.8 million, in line with Al Rajhi Capital’s estimate of SAR 325 million.

The Saudi company’s revenues are expected to grow 14 percent in 2018 as a result of the Namar Hospital, which will open in few weeks and lead to an increase the company’s top-line, the report said. The facility will have 400 beds and 200 clinics.

Dallah will also add new capacity at its Riyadh hospital (250 beds and160 clinics), expected to be completed in 2018. In addition, it has signed a memorandum of understanding U to build a hospital in Jeddah.

"We believe these expansion plans will ensure strong earnings growth for the company over the next few years," Al Rajhi Capital said.

The firm maintained its ‘Neutral’ rating on Dallah with a target price was set at SAR 115 per share.