Saudi banks, healthcare sector earnings to rise in Q4: Al Rajhi Capital

The overall outlook of Saudi companies will remain mixed in the fourth quarter of 2018, Al Rajhi Capital said in a new report on Wednesday.

While the bottom-line of Saudi Arabia's banking, food and healthcare sector will maintain its upward momentum, the petrochemical and retail sector will witness decline.

The aggregate earnings of the petrochemical sector will decline sequentially in Q4 2018, largely on account of lower product prices amid weak demand and plants shutdowns for a couple of companies offsetting a drop in feedstock prices.   

The upward trajectory of the banking sector earnings is likely to continue in Q4 as well as indicated by a rise of 8.5 percent year-on-year (YoY) till October 2018 to SAR 40.6 billion.  

In Q4, sales volumes for cement companies are expected to increase slightly on quarterly basis, as Q3 was affected by seasonality. On the prices side, prices are expected to be flat compared to the previous quarter.   

The bottom-line of the telecom in Q4 is likely to reflect the comprehensive settlement agreement pertaining to the commercial service provisioning fees with the government agencies.  

The earnings of the food & agriculture sector will rise 38 percent YoY in Q4 2018, largely driven by improved performance from Savola.

The fourth quarter is comparatively a strong quarter for the healthcare sector due to seasonality.