Arabian Cement swings to losses in H1 on lower prices, soft demand

01/08/2018 Argaam Exclusive

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Arabian Cement Co. has sustained net losses of SAR 57 million for the first half of 2018, versus net profit of SAR 136.2 million in year-earlier period, driven by lower selling prices amid soft demand and severe competition.



Financials (M)

Item 6m 2017 6m 2018 Change‬
Revenues 494.48 307.56 (37.8 %)
Gross Income 166.89 (22.83) (113.7 %)
Operating Income 133.94 (58.29) (143.5 %)
Net Income 136.18 (56.99) (141.9 %)
Average Shares 100.00 100.00 -
EPS (Riyals) 1.36 (0.57) (141.9 %)

The cement producer incurred SAR 50.9 million losses in Q2 2018, versus net profit of SAR 35.5 million in year-earlier period, due to lower sales, and decreased prices on weak demand and fierce competition.

 

On a sequential basis, the company widened losses by more than eight times compared to net losses of SAR 6.1 million in Q1 2018.



Current Quarter Comparison (M)

Compared With The
Item Q2 2017 Q2 2018 Change‬
Revenues 222.37 107.81 (51.5 %)
Gross Income 53.01 (35.64) (167.2 %)
Operating Income 35.15 (52.22) (248.6 %)
Net Income 35.52 (50.89) (243.3 %)
Average Shares 100.00 100.00 -
EPS (Riyals) 0.36 (0.51) (243.3 %)


Financial results (Million)

Period Revenues Change Gross Income Change Operating Income Change
Q1 2009 203.86 (2.7 %) 115.31 (5.3 %) 103.38 (6.3 %)
Q2 2009 191.04 1.0 % 99.37 (11.5 %) 87.51 (11.7 %)
Q3 2009 162.84 (6.5 %) 88.09 13.5 % 77.70 18.2 %
Q4 2009 179.30 20.7 % 87.44 29.1 % 72.38 39.7 %
Q1 2010 201.72 (1.0 %) 90.03 (21.9 %) 80.63 (22.0 %)
Q2 2010 194.43 1.8 % 95.19 (4.2 %) 86.14 (1.6 %)
Q3 2010 164.23 0.9 % 89.54 1.6 % 78.47 1.0 %
Q4 2010 184.21 2.7 % 44.17 (49.5 %) 25.51 (64.8 %)
Q1 2011 230.10 14.1 % 133.97 48.8 % 121.67 50.9 %
Q2 2011 302.99 55.8 % 139.30 46.3 % 127.53 48.1 %
Q3 2011 277.72 69.1 % 125.69 40.4 % 114.29 45.7 %
Q4 2011 267.76 45.4 % 104.89 137.5 % 88.37 246.4 %
Q1 2012 355.12 54.3 % 174.38 30.2 % 151.67 24.7 %
Q2 2012 369.30 21.9 % 173.23 24.4 % 162.44 27.4 %
Q3 2012 337.90 21.7 % 98.58 (21.6 %) 89.92 (21.3 %)
Q4 2012 308.32 15.1 % 91.15 (13.1 %) 77.65 (12.1 %)
Q1 2013 352.30 (0.8 %) 169.10 (3.0 %) 158.45 4.5 %
Q2 2013 373.42 1.1 % 144.75 (16.4 %) 133.89 (17.6 %)
Q3 2013 290.44 (14.0 %) 95.19 (3.4 %) 85.36 (5.1 %)
Q4 2013 348.97 13.2 % 133.24 46.2 % 119.96 54.5 %
Q1 2014 422.47 19.9 % 177.44 4.9 % 166.04 4.8 %
Q2 2014 480.55 28.7 % 227.74 57.3 % 212.95 59.0 %
Q3 2014 386.34 33.0 % 154.24 62.0 % 143.28 67.9 %
Q4 2014 430.23 23.3 % 171.18 28.5 % 153.27 27.8 %
Q1 2015 453.00 7.2 % 234.15 32.0 % 215.07 29.5 %
Q2 2015 446.57 (7.1 %) 189.93 (16.6 %) 173.62 (18.5 %)
Q3 2015 328.00 (15.1 %) 108.56 (29.6 %) 96.81 (32.4 %)
Q4 2015 414.99 (3.5 %) 190.94 11.5 % 172.90 12.8 %
Q1 2016 404.58 (10.7 %) 222.27 (5.1 %) 205.74 (4.3 %)
Q2 2016 363.32 (18.6 %) 162.81 (14.3 %) 146.48 (15.6 %)
Q3 2016 248.89 (24.1 %) 100.83 (7.1 %) 87.85 (9.3 %)
Q4 2016 240.11 (42.1 %) 65.66 (65.6 %) 44.73 (74.1 %)
Q1 2017 272.11 (32.7 %) 113.88 (48.8 %) 98.79 (52.0 %)
Q2 2017 222.37 (38.8 %) 53.01 (67.4 %) 35.15 (76.0 %)
Q3 2017 163.04 (34.5 %) 55.39 (45.1 %) 43.02 (51.0 %)
Q4 2017 248.23 3.4 % 127.19 93.7 % 104.61 133.9 %
Q1 2018 199.75 (26.6 %) 12.81 (88.8 %) (6.07) (106.1 %)
Q2 2018 107.81 (51.5 %) (35.64) (167.2 %) (52.22) (248.6 %)


Profit Performance (Million)

Period Net Income Change EPS(Riyal) Extraordinary Income/Expense Net Profit Before Unusual Items EPS Before XO Items
Q1 2009 103.78 (10.0 %) 1.04 - 103.78 1.04
Q2 2009 82.65 (8.6 %) 0.83 - 82.65 0.83
Q3 2009 72.82 1.5 % 0.73 - 72.82 0.73
Q4 2009 (87.23) (286.5 %) (0.87) (131.00) 43.77 0.44
Q1 2010 81.74 (21.2 %) 0.82 - 81.74 0.82
Q2 2010 81.17 (1.8 %) 0.81 - 81.17 0.81
Q3 2010 81.68 12.2 % 0.82 - 81.68 0.82
Q4 2010 10.85 112.4 % 0.11 (12.45) 23.30 0.23
Q1 2011 116.02 41.9 % 1.16 - 116.02 1.16
Q2 2011 111.75 37.7 % 1.12 - 111.75 1.12
Q3 2011 104.92 28.5 % 1.05 - 104.92 1.05
Q4 2011 70.35 548.4 % 0.70 (1.57) 71.92 0.72
Q1 2012 146.14 26.0 % 1.46 - 146.14 1.46
Q2 2012 71.93 (35.6 %) 0.72 (86.80) 158.73 1.59
Q3 2012 87.03 (17.1 %) 0.87 - 87.03 0.87
Q4 2012 82.33 17.0 % 0.82 - 82.33 0.82
Q1 2013 157.26 7.6 % 1.57 - 157.26 1.57
Q2 2013 124.65 73.3 % 1.25 (14.54) 139.19 1.39
Q3 2013 16.85 (80.6 %) 0.17 (79.34) 96.18 0.96
Q4 2013 (106.67) (229.6 %) (1.07) (212.15) 105.48 1.05
Q1 2014 167.14 6.3 % 1.67 - 167.14 1.67
Q2 2014 199.80 60.3 % 2.00 - 199.80 2.00
Q3 2014 133.94 695.0 % 1.34 - 133.94 1.34
Q4 2014 144.55 235.5 % 1.45 - 144.55 1.45
Q1 2015 195.27 16.8 % 1.95 (15.00) 210.27 2.10
Q2 2015 161.94 (18.9 %) 1.62 - 161.94 1.62
Q3 2015 89.48 (33.2 %) 0.89 - 89.48 0.89
Q4 2015 153.46 6.2 % 1.53 - 153.46 1.53
Q1 2016 225.59 15.5 % 2.26 17.76 207.83 2.08
Q2 2016 141.00 (12.9 %) 1.41 - 141.00 1.41
Q3 2016 97.17 8.6 % 0.97 - 97.17 0.97
Q4 2016 24.05 (84.3 %) 0.24 - 24.05 0.24
Q1 2017 100.66 (55.4 %) 1.01 - 100.66 1.01
Q2 2017 35.52 (74.8 %) 0.36 - 35.52 0.36
Q3 2017 29.51 (69.6 %) 0.30 - 29.51 0.30
Q4 2017 97.04 303.5 % 0.97 - 97.04 0.97
Q1 2018 (6.10) (106.1 %) (0.06) - (6.10) (0.06)
Q2 2018 (50.89) (243.3 %) (0.51) - (50.89) (0.51)

Profitability

Period Gross Margin OIBDA Margin Net Margin Before Unusual Items
Q1 2009 52.11 % 53.21 % 43.69 %
Q2 2009 50.17 % 54.59 % 42.49 %
Q3 2009 52.46 % 58.48 % 43.32 %
Q4 2009 52.94 % 61.16 % 41.11 %
Q1 2010 49.66 % 60.00 % 38.23 %
Q2 2010 48.86 % 59.78 % 37.86 %
Q3 2010 48.97 % 59.93 % 38.99 %
Q4 2010 42.83 % 53.17 % 35.98 %
Q1 2011 46.95 % 56.30 % 39.09 %
Q2 2011 46.17 % 55.86 % 37.75 %
Q3 2011 44.54 % 54.78 % 35.78 %
Q4 2011 46.72 % 57.34 % 37.51 %
Q1 2012 45.22 % 55.28 % 36.12 %
Q2 2012 45.53 % 53.52 % 37.93 %
Q3 2012 41.43 % 48.18 % 34.87 %
Q4 2012 39.20 % 48.50 % 34.60 %
Q1 2013 38.90 % 48.96 % 35.48 %
Q2 2013 36.71 % 48.19 % 33.95 %
Q3 2013 37.77 % 50.58 % 35.86 %
Q4 2013 39.72 % 49.70 % 36.49 %
Q1 2014 38.36 % 47.67 % 35.39 %
Q2 2014 41.08 % 49.41 % 36.86 %
Q3 2014 42.28 % 49.87 % 37.01 %
Q4 2014 42.49 % 49.49 % 37.53 %
Q1 2015 44.99 % 51.54 % 39.34 %
Q2 2015 43.67 % 50.08 % 37.92 %
Q3 2015 42.46 % 49.00 % 36.57 %
Q4 2015 44.05 % 50.66 % 37.45 %
Q1 2016 44.64 % 51.42 % 38.43 %
Q2 2016 45.31 % 52.52 % 39.17 %
Q3 2016 47.27 % 54.86 % 41.87 %
Q4 2016 43.88 % 52.01 % 37.40 %
Q1 2017 39.41 % 48.35 % 32.27 %
Q2 2017 33.90 % 43.39 % 26.17 %
Q3 2017 32.08 % 41.88 % 21.14 %
Q4 2017 38.58 % 47.57 % 29.01 %
Q1 2018 29.81 % 38.88 % 18.71 %
Q2 2018 22.22 % 33.28 % 9.68 %


Per Share Data (Riyal)

Compared With The
Period Shares Outstanding (M) EPS (Riyal) Adjusted EPS (Riyal) Book Value (BV)
Q1 2009 100.00 3.13 3.13 22.11
Q2 2009 100.00 3.05 3.05 22.99
Q3 2009 100.00 3.06 3.06 23.04
Q4 2009 100.00 1.72 3.03 22.22
Q1 2010 100.00 1.50 2.81 23.12
Q2 2010 100.00 1.49 2.80 23.66
Q3 2010 100.00 1.57 2.88 24.45
Q4 2010 100.00 2.55 2.68 24.44
Q1 2011 100.00 2.90 3.02 25.59
Q2 2011 100.00 3.20 3.33 25.44
Q3 2011 100.00 3.44 3.56 26.42
Q4 2011 100.00 4.03 4.05 27.44
Q1 2012 100.00 4.33 4.35 29.03
Q2 2012 100.00 3.93 4.82 27.50
Q3 2012 100.00 3.75 4.64 28.35
Q4 2012 100.00 3.87 4.74 29.19
Q1 2013 100.00 3.99 4.85 30.77
Q2 2013 100.00 4.51 4.66 30.48
Q3 2013 100.00 3.81 4.75 29.71
Q4 2013 100.00 1.92 4.98 28.71
Q1 2014 100.00 2.02 5.08 30.36
Q2 2014 100.00 2.77 5.69 31.03
Q3 2014 100.00 3.94 6.06 30.57
Q4 2014 100.00 6.45 6.45 31.92
Q1 2015 100.00 6.74 6.89 33.57
Q2 2015 100.00 6.36 6.51 31.99
Q3 2015 100.00 5.91 6.06 30.44
Q4 2015 100.00 6.00 6.15 31.84
Q1 2016 100.00 6.30 6.13 34.16
Q2 2016 100.00 6.10 5.92 33.14
Q3 2016 100.00 6.17 5.99 31.85
Q4 2016 100.00 4.88 4.70 32.51
Q1 2017 100.00 3.63 3.63 33.08
Q2 2017 100.00 2.57 2.57 31.25
Q3 2017 100.00 1.90 1.90 30.48
Q4 2017 100.00 2.63 2.63 29.49
Q1 2018 100.00 1.56 1.56 29.46
Q2 2018 100.00 0.70 0.70 27.74

Multiple Ratios (End of Period Price)

Compared With The
Period P/E Adjusted P/E Price/book
Q1 2009 8.93 8.93 1.26
Q2 2009 11.81 11.81 1.57
Q3 2009 12.03 12.03 1.60
Q4 2009 20.23 11.48 1.57
Q1 2010 22.35 11.93 1.45
Q2 2010 19.02 10.10 1.19
Q3 2010 18.30 9.99 1.18
Q4 2010 10.71 10.21 1.12
Q1 2011 8.73 8.37 0.99
Q2 2011 11.29 10.87 1.42
Q3 2011 9.73 9.39 1.27
Q4 2011 8.91 8.88 1.31
Q1 2012 10.71 10.67 1.60
Q2 2012 11.34 9.26 1.62
Q3 2012 11.03 8.93 1.46
Q4 2012 10.32 8.43 1.37
Q1 2013 11.34 9.31 1.47
Q2 2013 12.01 11.64 1.78
Q3 2013 14.64 11.75 1.88
Q4 2013 26.76 10.32 1.79
Q1 2014 32.58 12.95 2.17
Q2 2014 25.35 12.35 2.26
Q3 2014 21.56 14.02 2.78
Q4 2014 12.02 12.02 2.43
Q1 2015 11.19 10.94 2.24
Q2 2015 11.91 11.64 2.37
Q3 2015 9.49 9.26 1.84
Q4 2015 7.93 7.73 1.49
Q1 2016 7.24 7.45 1.34
Q2 2016 8.38 8.63 1.54
Q3 2016 6.22 6.40 1.20
Q4 2016 9.16 9.51 1.37
Q1 2017 10.47 10.47 1.15
Q2 2017 13.99 13.99 1.15
Q3 2017 17.84 17.84 1.11
Q4 2017 13.07 13.07 1.16
Q1 2018 22.71 22.71 1.20
Q2 2018 42.41 42.41 1.06

Analysts Estimates (Million)

Item Q2 2018 (e) Q2 2018 (a) Change‬
Average 9.98 (50.89) (610.2 %)

Estimates vs Actual (Million)

Item Q2 2018 (e) Q2 2018 (a) Change
SNB Capital 25.00 (50.89) (303.6) %
Sico 16.00 (50.89) (418.1) %
Al Rajhi Capital (8.00) (50.89) (536.2) %
AlJazira Capital 6.90 (50.89) (837.6) %


Financial Ratios
Current
Market Cap (M Riyal) 2,690.00
Enterprise Value (EV) (M) 2,766.35
Shares Outstanding ((M)) 100.00
EPS ( Riyal) (TTM) 1.46
Book Value (BV) ( Riyal) 25.69
Par Value ( Riyal) 10.00
Adjusted P/E (Last12) 21.02
P/E (TTM) 18.49
Price/book 1.05
Return on Average Assets (%) (TTM) 4.6
Return on Average Equity (%) (TTM) 5.6
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Share Price

Arabian Cement Co.
26.90
(0.10) (0.37 %)

Arabian Cement Co. (ACC)

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