AlJazira Cap says Yansab’s Q2 2022 profit beats estimates, maintains ‘Overweight’

One of Yanbu National Petrochemical Co.’s (Yansab) factories

Yanbu National Petrochemical Co.’s (Yansab) Q2 2022 net profit of SAR 289 million came above AlJazira Capital estimates and market consensus of SAR 227 million and SAR 246 million, respectively.

During Q2 2022, Yansab remained under strain due to lower product margins and soaring utilization rates and other expenses compared to the year-ago period. The high pressure on petrochemical prices is the result of the decline in energy and crude oil prices.

However, rising utilization rates and decreased feedstock prices of liquid petroleum gas (LPG) such as propane may ease the pressure in the future, AlJazira Capital explained.

The brokerage remains positive on Yansab’s future utilization rates and estimates of gross profit margins recovery.

AlJazira Capital reiterated the “Overweight” recommendation on the stock, setting the target price at SAR 59.50, with estimates of a good cash dividend at 6% for 2022, after the company announced dividends of SAR 1.5 per share in H1 2022.