SABIC Agri-Nutrients reported a stronger than expected set of Q4 22 results. Although the net income declined by 21.5% yoy (-7.0% qoq) to SAR2.17bn, in Q4 22, it was higher than the SNB Capital and consensus estimates of SAR1.89bn and SAR1.88bn, respectively. The variance was due to 1) higher than expected operating rates and/or realized prices and 2) lower than expected operating costs. We highlight that SANIC recognized the acquisition option of TFC share in AlBayroni in Q4 22, resulting in...
Following a challenging H2 22, major headwinds are expected in the near-term for the Saudi petrochemicals sector. The expected global recession, high inflation levels and the commissioning of new capacities will test the sector’s dynamics, exerting pressure on product margins. However, we believe the full removal of COVID-19 restrictions in China by H2 23f is a key positive and will drive demand over the medium term. Valuations are generally attractive over the LT, but given the major headwin...
SABIC Agri-Nutrients reported a Q3 22 net income of SAR2.33bn, up 93.2% yoy (-22.9% qoq). This was slightly above the SNB Capital estimates of SAR2.19bn, but in-line with the consensus estimates of SAR2.31bn. The yoy growth in earnings is driven by higher revenue due to better prices and sales volume. This was partly offset by higher selling and distribution costs. Although revenue came in broadly in-line with our estimates, the variance in earnings was due to 1) better than expected gross ma...
The Saudi petrochemicals sector is going through an interesting period, as it is simultaneously facing major headwinds and attractive opportunities. Slowing global economic growth, supply-chain disruptions, new capacities and high feedstock prices are the sector’s main challenges. On the other hand, the ease of China’s lockdown has improved sentiments and will support outlook. We prefer companies with 1) favourable product mix, 2) feedstock advantage 3) low debt levels and 4) attractive divid...
The independent financial analyst theScreener just lowered the general evaluation of SABIC AGRI- NUTRIENTS (SA), active in the Speciality Chemicals industry. As regards its fundamental valuation, the title now shows 1 out of 4 stars while market behaviour can be considered moderately risky. theScreener believes that the title remains under pressure due to the loss of a star(s) and downgrades its general evaluation to Slightly Negative. As of the analysis date February 1, 2022, the closing price ...
We maintain our Neutral rating on SABIC-AN with a PT of SAR176.5. The near-term outlook is positive, supported by strong urea prices and translating into record earnings of SAR7.6bn in 2022f (+61.5% yoy). This is expected to lead to higher dividends and/or promising expansion plans, which we believe will be the key growth drivers going forward. Post 2022f, we expect the normalization of urea prices to exert pressure on earnings. The stock trades at 2022f EV/EBITDA of 8.7x, in line with the pe...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
SABIC Agri-Nutrients reported a strong set of Q2 21 results with a net income of SAR836mn, up 132% yoy (+97.9% qoq). The results were higher than the SNB Capital and consensus estimates of SAR743mn and SAR781mn, respectively. The better than expected results are mainly attributed to higher operating rates and realized prices. Revenue grew by 98% yoy (+22% qoq) to SAR1.84bn and was 6.7% higher than our estimates. We highlight operations of Ibn Al Baytar and Al Bayroni were consolidated from Q1...
SABIC Agri-Nutrients (previously SAFCO) reported a lower than expected set of Q4 20 results, with a net income declining by -32.1% yoy (-41.2% qoq) to of SAR234mn. This compares to the NCBC and consensus estimates of SAR303mn and SAR312mn, respectively. We believe the lower than expected results are mainly attributed to lower operating rates given SAFCO 4 maintenance shutdown, lower income from Ibn Al-Baytar and higher zakat rate. Based on our last published update in June 2020, we are Neutra...
SAFCO reported a better than expected set of Q3 20 results, with a net income of SAR398mn (up +10.5% qoq, down - 4% yoy). This compares to the NCBC and consensus estimates of SAR339mn and SAR366mn, respectively. We believe earnings variance is mainly due to higher operating rates as we expected SAFCO to conduct major shutdowns at three of its facilities (SAFCO 3, SAFCO 5 and Ibn Albaytar facilities), as per the 2019 annual report. Based on our last published update in June 2020, we are Neutra...
SAFCO reported a strong set of results in Q2 20, with a net income increasing +18.6% qoq (down -5.4% yoy) to SAR360mn. Results are significantly higher than the NCBC and consensus estimates of SAR279mn and SAR273mn, respectively. Although average urea prices declined -14.1% yoy (-6.3% qoq) in Q2 20, we believe the strong results are attributed to higher than expected operating rates. We estimate Q2 20 operating rates to be c118% vs 2019 rate of 93%. We are Neutral on SAFCO with a PT of SAR73....
The COVID-19 pandemic has resulted in major supply and demand shocks to the petrochemicals sector, pushing prices to their lowest levels in more than 10 years. It also resulted in major uncertainty on the sector’s 2020f earnings outlook. Beyond the negative impact of COVID-19, we believe the sector outlook remains muted, due to increasing supply, trade tensions and weak demand. We believe the sector is currently pricing-in a full recovery for the global economy, leaving limited attractive inv....
SAFCO reported a weaker-than-expected set of Q1 20 results with a net income of SAR304mn, declining -9.5% yoy (-10.3% qoq). This compares with the NCBC and consensus estimates of a net profit of SAR341mn and SAR332mn, respectively. We believe lower than expected results are mainly due to lower sales volumes as prices were broadly unchanged qoq. We advise investors to approach petrochemical sector with caution, as the rapid spread of Covid-19 and subsequent precautionary measures has adversely...
Cut SAFCO target price by 12% on higher long-term gas prices. Our new forecasts are based on Saudi’s new gas price of USD1.25/mmBtu in 2016, rising to USD3.0/mmBtu as of 2020 in line with Henry hub futures, versus a constant USD2.0/mmBtu assumption before. The 67% y-o-y hike in Saudi feedstock costs from USD0.75/mmBtu (in place since 1998) would raise SAFCO’s cash costs by 13%, shaving SAR145mn off 2016e earnings.
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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