Dallah’s Q3 earnings beat estimates, says SICO

Dallah reported Q3 net income at SAR 76.8 million, 28 percent and 24 percent higher than SICO Investment Bank’s estimates and analysts’ consensus of SAR 60 million and SAR 62 million respectively, the brokerage said in a note.

Revenues stood at SAR 295 million, up 8 percent YoY, which was 8 percent above SICO’s estimates of SAR 273 million.

Operating expenses also declined on year with lower provisioning and declines in selling and distribution expenses.

SICO named Dallah as its top sector pick due to high earnings growth, low Ministry of Health exposure and reasonable valuations. It maintained medium term estimates and target price at SAR 120 per share but upgraded the stock to “Buy” from “Neutral”.

Dallah’s brownfield Riyadh hospital project is expected to be completed by Q2 2019 and will be financed through internal operations and long-term bank Murabaha facilities.