Tasnee: Q4 22 Result Analysis | Another weak results

Tasnee reported net profit of SAR43mn in Q4 22, down 87.3% yoy (+152% qoq). This is lower than the SNB capital and consensus estimates of a net profit of SAR66mn and SAR117mn, respectively. The variance was due to 1) lower than expected gross margins and 2) lower profits from JVs. This was partly mitigated by higher than expected revenue and lower non opex. * Revenues stood at SAR939mn, down 19.2% yoy (+5.9% qoq) and were higher than our estimates of SAR789mn. We believe the increase is due ...

Saudi Petrochemicals Sector | Q4 Update | A difficult year ahead

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...

Tasnee: Q3 22 Results Analysis | Weak results, inline with the sector

Tasnee reported a net profit of SAR17mn in Q3 22, down 94.9% yoy (-94.2% qoq). This is significantly lower than the SNB Capital and consensus estimates of SAR163mn and SAR208mn, respectively. This is the lowest earnings since Q4 20 and similar to the weak results reported by the sector in Q3 22. Although revenue was in-line with our estimates, the decline in earnings was due to 1) lower gross margins driven by higher production and logistic costs 2) a decrease in profits from JVs 3) higher-th...

Tasnee: Profits drop despite sales growth

Tasnee reported a Q2 22 net profit of SAR297mn, down 16.7% yoy (-3.8% qoq). This is lower than the SNB capital and consensus estimates of SAR323mn and SAR316mn respectively. Although operating profits were in-line with our estimates, the weaker than expected results were due to higher-than-expected financing and zakat expenses. The yoy decline in profits were mainly due to a lower share of profits from JV’s, while the qoq decline was due to lower gross margins due to a rise feedstock costs. A...

Saudi Petrochemicals Sector | Q2 22 Sector Update | Challenges and opp...

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...

NATIONAL INDUSTRIAL sees a downgrade to Slightly Negative on account o...

The independent financial analyst theScreener just lowered the general evaluation of NATIONAL INDUSTRIAL (SA), active in the Commodity Chemicals industry. As regards its fundamental valuation, the title now shows 0 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 25, 2022, the closing price wa...

Tasnee: Strong top-line offset by low associates’ income

Tasnee reported a net profit of SAR333mn vs net loss of SAR42mn in Q3 20 and a net income of SAR357mn in Q2 21. This is in-line with the SNB capital and consensus estimates of net profits of SAR323mn and SAR319mn, respectively. Revenues grew by 75.3% yoy to SAR1.0bn, higher than our estimates of SAR769mn and Q2 21 of SAR780mn. The impact of higher top-line was offset by lower than expected income from associates. We estimate that income from associates came in at SAR469mn, compared to SAR588m...

Tasnee: Higher losses due to impairments

Tasnee reported a weak set of Q2 20 results, with net loss of SAR189mn in Q2 20 vs net loss of SAR76mn in Q1 20 and a profit of SAR212mn in Q2 19. This compares with the NCBC estimates of net loss of SAR42mn and the consensus estimates of net profit of SAR1.0mn. The weaker than expected results are mainly due to impairments related to AMIC. We await the full financials to update our PT and estimates. Revenues stood at SAR486mn (-33.5% yoy and -26.3% qoq), in-line with our estimates of SAR475m...

Saudi Petrochemical Sector: Q2 20 update – Covid-19 is not the only ...

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....

Fairly valued, impairments are key risks

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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...