Bahri’s Q3 profit misses estimate on ‘other income’ loss, says Al Rajhi Cap

25/10/2017 Argaam

 

National Shipping Company of Saudi Arabia’s (Bahri) third-quarter net profit of SAR 61 million fell short of Al Rajhi Capital’s estimate of SAR 165 million.

           

The profit miss is attributed to Bahri’s “operating profit” which included other income loss of SAR 10 million, compared to the brokerage firm’s estimate of SAR 15 million gain, Al Rajhi Capital said in an earnings review.

 

Meanwhile, Q3 earnings were also impacted by lower-than-expected income from associate Petredec at SAR 5 million, higher interest cost at SAR 90 million and likely higher-than-forecast minority interest.

 

The operating performance came in mostly in line with the brokerage firm’s forecast

 

“We cut our FY17e/FY18e revenue estimates by 5 percent/ 1 percent due to lower tanker rates, while our net income estimates are cut by 25 percent/ 15 percent due to lower revenue, higher interest costs and lower income from associates,” Al Rajhi Capital added.

 

Main downsides for the stock are a continuous weakness in tanker rates for an extended period of time, higher receivables along with bunker subsidy being gradually withdrawn.

 

Al Rajhi Capital upgraded Bahri to “overweight”, cutting the stock’s target price to SAR 30 from SAR 33. 

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