Higher sales help Petro Rabigh swing to profit in Q1: Falcom

Rabigh Refining and Petrochemical Co. (Petro Rabigh) recorded net profit of SAR 296.1 million in Q1 2018, versus SAR 239.7 million in losses in Q1 2017, on higher sales volumes, increased operating income and lower financial liabilities, Falcom Financial Services said in a report.

Q1 revenue jumped by 47.1 percent year-on-year (YoY) to SAR 9.9 billion, boosted by higher sales as well as stable production rates.

“Q1 performance was yet hit by halting operations in the air separation unit, which weighed on production in all plants,” Falcom said.

Petro Rabigh is expected to report strong revenue and operational margins over the two coming years, backed by launching the expansion project –phase II in H1 2018. However, this may be offset by higher leverage levels.

“We upgraded the stock’s target price to SAR 24.8, and maintained a “neutral” recommendation, thanks to improved earnings forecasts,” Falcom said.