Taiba’s Q2 2019 profit beats forecasts, says NCB Cap

Taiba Investments Co. posted a higher than expected set of results in Q2 2019, as its net income of SAR 49.2 million exceeded NCB Capital’s estimate of SAR 33.1 million. 

“The better than expected results came mainly due to higher than expected sales of SAR 108 million by 0.7 percent versus our estimates of SAR 94 million, higher than expected gross margins, as well as higher dividend income from investments,” NCB Capital said in a recent earnings note.

The second quarter sales, which hit SAR 108 million, also topped the investment bank’s forecasts of SAR 94 million. 

Gross profit margins contracted to 58.8 percent, compared to NCB Capital’s estimates of 55 percent. 

NCB Capital recommended “neutral” rating on the stock, with a target price of SAR 33.7.  

Any announcements on expansion projects will be a key positive driver for the stock, the report said.

“However, dividends may be at risk going forward provided the planned projects of Taiba and the current high pay-out levels of over 100 percent”, it added.