Yansab Q1 2019 net profit below estimates: Aljazira Cap

Yanbu National Petrochemical Co.’s (Yansab) net income of SAR 390.6 million in the first quarter 2019 fell short of Aljazira Capital’s expectations and street estimates of SAR 530.8 million and SAR 502 million, respectively, the brokerage firm said in an earnings review.

The firm attributed the decline of Yansab’s actual net profit compared to estimates to lower than expected sales related to slow production ramping-up after plant shutdown.
 

“Yansab is expected to witness improved forward performance, given high production efficiency and new capacities coming on stream”, the report added.
 

The plants shutdown in Q4 2018 would more translate into efficiency improvement in Q2 2019 and onward.

The company is expected to witness an improved forward performance for operating rates and volumes, given high production efficiency and new capacities of almost 80Kt/annually of Ethylene Glycol, the brokerage firm added.

Aljazira Capital downgraded its recommendation on the company’s stock to “neutral” with a target price at SAR 75 per share.