Yansab’s Q4 misses estimate on shutdown: Al Rajhi Cap

Yanbu National Petrochemical Co.'s (Yansab) fourth-quarter 2018 net profit of SAR234 million missed Al Rajhi Capital’s estimates of SAR 473 million, the brokerage firm said in an earnings review on Sunday.

Revenue fell 25 percent year-on-year to SAR 1.62 billion, falling short of the brokerage's estimates of SAR 1.66 billion.

The declines were attributed to higher than expected costs related to the shutdown as well as a related to the expansion project of MEG plant.

"The MEG plant of Yansab post-expansion has successfully started its commercial operations and we expect this could improve earnings by four percent for 2019," it added.

Al Rajhi Capital recommended a “neutral” rating on the stock, but revised the target price lower to SAR 70 a share.

“We continue to remain positive on Yansab, given its strong operational capabilities coupled with robust balance sheet (net cash position) and healthy FCF generation capabilities. Further, capex requirements are limited following the completion of MEG expansion project," it noted.