In this report, Argaam highlights the expected results of Saudi Kayan Petrochemical Co. (Saudi Kayan) for the third quarter of 2021, as well as its key events and feedstock prices.
The third-quarter revenue is expected to rise 36.8% year-on-year (YoY) to SAR 2.880 billion.
| Item | Q3 2020 |
Q4 2020 |
Q1 2021 |
Q2 2021 |
Q3 2021 (Average Estimate) |
|---|---|---|---|---|---|
| Sales | 2,105.54 | 2,476.95 | 2,683.33 | 2,973.71 | 2,880.10 |
| Change % | (8.58%) | 9.62% | 42.13% | 93.49% | 36.79% |
| Income from Affiliate | 4.02 | 0.00 | 0.00 | 0.00 | NA |
| Change % | (23.50%) | NA | NA | NA | NA |
| Item | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 (Average Estimate) |
|---|---|---|---|---|---|
| Net Income | (28.16) | 158.42 | 492.89 | 781.00 | 628.90 |
| Extraordinary income/expense | 0.00 | (34.93) | 0.00 | 0.00 | - |
| Net Profit Before Unusual Items | (28.16) | 193.35 | 492.89 | 781.00 | - |
| EPS Before Unusual Items (Riyal/Share) | (0.02) | 0.13 | 0.33 | 0.52 | 0.42 |
Key events in Q3 2021
Feedstock Prices ($/Ton)
Saudi Kayan depends on ethane and butane as the main feedstock for its olefins unit. The mix is then converted into ethylene glycol (1.065 million tons annually), low- and high-density polyethylene (300,000 and 400,000 tons annually), polypropylene (350,000 tons annually), polycarbonate (260,000 tons annually), along with butanol and other products.
Prices of End Products
Prices of end products rose YoY in the three-month period. On the other hand, end products dropped on a QoQ basis, except for ethylene glycol that added 7%.
Average forecasts
Saudi Kayan is projected to turn to a net profit of SAR 628.9 million in Q3 2021, against a net loss of SAR 28.2 million in the year-ago period, based on average estimates by five research firms.
| Analyst | Million Riyals |
|---|---|
| Riyad Capital | 678.00 |
| Osool and Bakheet Investment Co. | 638.50 |
| AlJazira Capital Company | 619.00 |
| SNB Capital Company | 617.00 |
| Arqaam Capital Limited Co. | 592.00 |
| Average | 628.90 |
| Net Profit Before Unusual Items (2020 - Q3) | (28.16) |
| Change % | 2,333.23% |
| Item | The Company | TASI |
|---|---|---|
| YTD | (35.13 %) | 34.02 % |
| Change(12M) | (35.95 %) | 35.08 % |
| Previous Close | 19.40 | 11,542.88 |
| P/E adjusted (x) | 13.63 | 24.03 |
| EPS (TTM) before unusual items (SAR/Share) | 0.96 | - |
| P/E (TTM) | NEG |
| P/E Before Unusual Items (TTM) | NEG |
| P/BV | 0.88 |
| Dividend Yield | - |
| Market Cap. (M) | 10,665.00 |
| Return on Average Assets | (6.64 %) |
| Return on Average Equity | (13.30 %) |
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