Saudi Kayan’s Q4 2018 results miss estimates: Falcom

Saudi Kayan Petrochemicals Co. (Kayan) reported lower losses (SAR 110.9 million) in Q4 2018, missing the consensus estimate of a net profit of SAR 335.5 million by a wide margin, Falcom Financial Services said in a note.

Revenue rose 22.8 percent year-on-year (YoY) to SAR 12.2 billion in 2018, driven by higher average selling prices and increase in sales volumes.

Saudi Kayan continues to improve production efficiency and utilization rate, which would have a positive impact on the company’s bottom line in upcoming quarters.

“Saudi Arabia’s petrochemical industry is expected to benefit from large-scale investments in downstream projects,” according to Falcom.

The Kingdom will continue to boost its capacity to meet the growing demand, to benefit from the availability of cheap feedstock as well as to reduce its economic reliance on crude oil exports.

“We have revised our target price slightly upward, with a fair value of SAR 16.1 per share. We revised our rating on the stock to Overweight from Neutral,” Falcom added.