In this report, Argaam highlights the expected results of Saudi Aramco Base Oil Co. (Luberef) in Q3 2023, in addition to the development in quarterly earnings, as well as performance and profitability indicators.
The third-quarter revenue is projected to fall 7.34% year-on-year (YoY) to SAR 2.52 billion.
| Item | Q3 2022 |
Q4 2022 |
Q1 2023 |
Q2 2023 |
Q3 2023 (Average Estimate) |
|---|---|---|---|---|---|
| Sales | 2,721.82 | 1,808.83 | 1,796.74 | 2,613.03 | 2,522.00 |
| Change % | 14.43% | (25.13%) | (34.44%) | (21.82%) | (7.34%) |
| Item | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 (Average Estimate) |
|---|---|---|---|---|---|
| Net Income | 474.79 | 763.19 | 445.67 | 454.85 | 288.50 |
| Extraordinary income/expense | (23.46) | 194.23 | 0.00 | 0.00 | - |
| Net Profit Before Unusual Items | 498.24 | 568.96 | 445.67 | 454.85 | - |
| EPS Before Unusual Items (Riyal/Share) | 2.95 | 3.37 | 2.64 | 2.70 | 1.71 |
Key Events in Q3 2023
- The company’s board of directors decided to distribute a 50% cash dividend, or SAR 5 a share, for H1 2023.
- The board of directors approved adopting a performance-linked dividend policy at 60-80% of the company’s annual free cash flows. The company will factor in the capital expenditure, and its ability to fund obligations, including capital growth plans.
Average Estimates
Luberef is forecast to post a net profit of SAR 288.5 million for Q3 2023, 42.1% lower YoY, according to average estimates by two research firms.
| Analyst | Million Riyals |
|---|---|
| SNB Capital Company | 326.00 |
| Al Rajhi Capital Company | 251.00 |
| Average | 288.50 |
| Net Profit Before Unusual Items (2022 - Q3) | 498.24 |
| Change % | (42.10%) |
Performance and Profitability Indicators
The following table illustrates the stock performance, P/E and earnings per share (EPS) in the last 12 months (TTM) and year to date (YTD):
| Item | The Company | TASI |
|---|---|---|
| YTD | (23.83 %) | (0.40 %) |
| Change(12M) | (19.39 %) | (12.27 %) |
| Previous Close | 126.60 | 10,504.76 |
| P/E adjusted (x) | 10.86 | 21.89 |
| EPS (TTM) before unusual items (SAR/Share) | 11.66 | - |
| P/E (TTM) | 18.08 |
| P/E Before Unusual Items (TTM) | 18.58 |
| P/BV | 4.51 |
| Dividend Yield | 6.87 % |
| Market Cap. (M) | 18,663.75 |
| Return on Average Assets | 11.72 % |
| Return on Average Equity | 23.50 % |
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