SABIC reported a disappointing set of Q4 22 results with a net income of SAR293mn, down 94.1% yoy (-84.0% qoq). This is significantly lower than the SNB Capital and consensus estimates of SAR2.39bn and SAR1.96bn respectively. Although revenues were in-line with our estimates, the variance is due to higher than expected feedstock prices and production costs. Adjusting for one-offs, net income was SAR660mn (-72.0% qoq). * Revenues stood at SAR42.98bn, down 16.1% yoy (-8.3% qoq), in line with o...
SABIC AN announced a surprising cash dividend of SAR8.0/share for H2 22, taking the full year dividends to SAR12.0/share and reflecting a dividend yield of 8.8%. This is higher than our estimates of SAR7.0/share and compared to 2021 dividends of SAR4.3. The company said that the dividends consists of 1) SAR4.0/share related to H2 22 and 2) SAR4.0/share one-off dividends for the outstanding performance of the company in 2022. Following to our Petrochemicals sector update published yesterday, w...
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 reported a weak set of Q3 22 results, with a net income declining by 67.1% yoy (-76.8% qoq) to SAR1.8bn. This is significantly lower than the SNB Capital and consensus estimates of SAR4.7bn and SAR5.2bn, respectively. This is the weakest earnings since Q3 20. In-line with other Saudi petrochemicals companies results in Q3 22, we believe the variance is due to higher-than-expected feedstock prices, logistics, and/or inventory loss. Adjusting for the SAR0.51bn impairment provision Q3 22, ...
SABIC reported a better-than-expected set of Q2 22 results, with a net income increasing by 3.8% yoy (+22.5% qoq) to SAR7.93bn. This is significantly higher than the SNB Capital and consensus estimates of SAR6.10bn and SAR6.25bn respectively. We believe, the growth in earnings and variance was due 1) higher than expected revenues 2) higher gross profits despite higher feedstock costs 3) higher share of profits from JV’s and associates. This was partially offset by higher-than-expected selling...
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...
SAUDI BASIC INDUSTRIES (SA), a company active in the Speciality Chemicals industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the ...
SABIC reported a net income of SAR5.6bn in Q3 21 vs SAR1.1bn in Q3 20 and SAR7.64bn in Q2 21. However, this is lower than the SNB Capital and consensus estimates of SAR6.1bn and SAR6.5bn, respectively. Revenues increased by 49.2% yoy (+3.0% qoq) to SAR43.7bn (highest since Q3 18), it was offset by higher feedstock and operating costs. * Revenues stood at SAR43.7bn in Q3 21, up 49.2% yoy (+3.0% qoq) and are the highest quarterly revenue since Q3 18. This is broadly in-line with our estimates....
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....
In November, strong demand from China (a key petrochemicals market) supported petrochemical products prices. Industrial activity recovered strong in China, with manufacturing PMI increased to more than 3 year high at 52.1. HDPE and PP prices increased +2.1% mom and +8.8% mom, respectively, while urea prices fell -0.7% mom to US$265. The PP-propane and PP-naphtha spreads increased +2.5% mom and +14.3% mom to US$614 and US$666, respectively. * In November, China’s manufacturing PMI reached 52...
SABIC reported a better than expected set of Q3 20 results with a net income of SAR1.09bn compared to a loss of SAR2.2bn in Q2 20 and a profit of SAR0.74bn in Q3 19. The results are higher than the NCBC and consensus estimates of SAR0.82bn and SAR0.72bn, respectively. The better than expected results are mainly attributed to a reversal of impairment of provisions related to Clariant. Adjusting for that, net income would be SAR0.4bn.
SABIC reported its 3rd consecutive losses in Q2 20, with a net loss of SAR2.2bn. This is the weakest set of results since Q1 09. The results were significantly lower than the NCBC and consensus estimates of net losses of SAR677mn and SAR209mn, respectively. The results are compared to a net loss of SAR1.1bn in Q1 20 and a profit of SAR2.0bn in Q2 19. Although revenues were broadly in-line with our estimates, we believe the lower than expected results are due to impairments and lower margins. ...
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....
MSCI announced the results of the August 2019 Quarterly Index Review (QIR) for the MSCI Equity Indexes, which resulted in no changes in the constituents of the MSCI Saudi Index of 31 stocks. Saudi will have a weight of 2.83% in the MSCI Emerging Markets index. Saudi’s addition to the MSCI Emerging Markets index is expected to result in a total inflow of cSAR44.8bn (cUS$11.9bn) from passive funds, of which the second tranche represents 50% (i.e. SAR22.4bn) of total inflows. The changes for the ...
The implementation date for the third tranche of the inclusion of the Saudi market into the FTSE index series is 24 June 2019, (with a closing price date of 20 June 2019). To recap, the Saudi market is projected to have a weight of 3.0% in the FTSE Emerging All Cap index and 0.30% in the FTSE Global Equity index. Saudi’s addition to the FTSE Emerging All Cap index is expected to result in total inflows of cSAR22.2bn (cUS$5.9bn) mainly from passive funds. The third tranche represents 25% (i.e. ...
In Q1 19, the TASI net income declined by 8.5% yoy (+43.1% qoq) to SAR23.4bn. The yoy decline is mainly due to a 40.0% yoy decline in petrochemicals, increased losses in utilities and a 31.2% yoy decline in healthcare profits. This was partially mitigated by higher profits in banks (+12.7% yoy), telecoms (+21.9% yoy), food and beverage (+35.9% yoy), and cement (+61.9% yoy). The yoy decline in the petrochemical sector was due to weak prices and lower spreads, while banks benefited from NIM expans...
SABIC posted its highest overall net profit since June 2015. Indeed, the company reported a 10.7% rise in Q3 2017 net profit. The net profit amounted to SAR5.79bn in the three months to Sept. 30, up from SAR5.23bn in the year-earlier period. 9M 2017 revenues amounted to SAR111.78bn compared to SAR105.52bn for the similar period of last year with an increase of 5.9%, recording the highest sales since Q2 2015. For the first nine months of 2017, the firm’s net profit rose by 12.4%, year-on-year, ...
The net profit at SABIC jumped by 80% from a year earlier in the first quarter of 2017. The company made a net profit of SAR5.24bn (US$1.40bn) in the three months to March 31, up from SAR2.91bn in the year-earlier period. Q1 2017 Gross sales totalled SAR36.95bn, up by 10% from SAR33.47bn a year ago.
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