Saudi Cement’s Q2 2019 profit below forecasts: Aljazira Capital

Saudi Cement posted net income of SAR 92.3 million in the second quarter 2019, missing Aljazira Capital and consensus estimates’ of SAR 108.8 million and SAR 103.9 million, respectively.

The cement producer’s Q2 2019 profit increased 59 percent compared to the same period last year, but declined of 30.3 percent compared to the first quarter 2019.

“The year-on-year increase is mainly attributed to improved selling price and volumetric sales, despite an increase in administrative expenses. Deviation in Q2 earnings from our estimates is mainly ascribed to higher-than-expected cost per ton,” Aljazira Capital noted.

The company’s sales of SAR 338.6 million exceeded the research firm’s estimates of SAR 317.3 million.

Average price stood at SAR 217.6 per ton, above the brokerage firm’s estimate of SAR 210.7 a ton.

“Selling prices is expected to stabilize at a higher level as cement producer are expected to keep prices rational after recognizing losses in previous quarters,” it added.

Aljazira Capital maintained its “underweight” recommendation on the stock with a target price at SAR 56.50 a share.