Southern Cement’s Q4 profit beats estimate: Al Rajhi Cap

Southern Province Cement Co.’s fourth-quarter 2018 net profit of SAR 52 million exceeded Al Rajhi Capital's and consensus estimates of SAR 23 million and SAR 27 million, respectively, the brokerage firm said in an earnings review.

The beat was driven by higher than expected selling price and lower than anticipated cost.

Revenue stood at SAR 240 million beating the brokerage's estimate of SAR 221 million, driven by higher quantity sold and increase in average selling price.

Gross profit margin declined to 30 percent in Q4 2018 from 45 percent in Q4 2017 as cost came under pressure, the report noted.

Al Rajhi Capital revised its rating on the stock to "underweight", setting the target price at SAR 37 a share.

"Going forward, we expect the company to continue to dominate the southern region and consolidate its presence in the western region, given the strong production capacity in the region and close client tie-ups," the brokerage noted.