We host an earnings call with SGS Company on Wednesday 24 May 2023 Dial in at 03:30 pm (Saudi), 01:30pm (GMT), 08:30 am (New York), 04:30 pm (Dubai) Hosted by Talha Nazr Dial- in Details SGS Q1 23 Earnings Call registration - Webex Access Code – 2408 352 6059 Password – Q123
We host an earnings call with Saudi Ground Services Company on Tuesday 28 March 2023 Dial in at 03:30 pm (Saudi), 1:30 pm (GMT), 08:30 am (New York), 04:30 pm (Dubai) Hosted by Iyad Ghulam, CFA Dial- in Details Cisco Webex Meetings - Register Meeting Access Code – 2398 869 8863 Password – Q422
Q3 2022 results * Revenue stood at SAR555mn, up 31.9% yoy (+12.0% qoq). The growth is due to recovery in the business activity post the lifting of COVID-19 restrictions, Hajj and holiday seasons. * Gross profit came in at SAR48mn, down 16.6% yoy (-8.9% qoq) while gross margins contracted to 8.6% in Q3 22 vs 10.5% in Q2 22. The qoq increase in costs was driven by seasonal employees during Hajj. These costs are non-recurring in nature. In absolute terms, Hajj costs increased by SAR23mn yo...
SGS reported a net loss of SAR51mn in Q3 22 vs losses of SAR43mn in Q3 21 and SAR67mn in Q2 22. The yoy increase in losses is mainly due to an increase in the cost of revenue driven by higher employee cost and higher Zakat charge of SAR13.9mn. The losses are significantly higher than the SNB Capital and consensus estimates of losses of SAR25mn and SAR17mn, respectively. Revenues came in at SAR555mn (+31.9% yoy, 12.0% qoq), higher than our estimates at SAR520mn which we believe is a key positi...
We host an earnings call with Saudi Ground Services Company on Tuesday 23 August 2022 Dial in at 12:00 pm (GMT), 01:00 pm (London), 08:00 am (New York), 04:00 pm (Dubai) Hosted by Iyad Ghulam, CFA Dial- in Details Webex Link Access Code – 2409 224 5246 Password – Q22022
SGS reported a net loss of SAR67mn in Q2 22 vs losses of SAR93mn in Q2 21 and SAR19mn in Q1 22. The losses are significantly higher than the SNB Capital and consensus estimates of losses of SAR10mn and SAR13mn respectively. Although revenue came in 7.4% higher than our estimates, the variance was mainly due to lower-than-expected gross margin and higher than expected non-opex. The increase in non-opex was due to an additional one-off zakat adjustment of SAR33mn. Excluding the one-off, Q2 22 l...
SUMMARY: According to Bloomberg, GACA will reduce airport charges by 35% on major airports (Riyadh, Jeddah and Dammam) starting this year. Airports have the flexibility to reduce the rates further, which we believe can drive growth. We believe the reduction in rates will increase the competitiveness of Saudi airports and will lead to higher traffic, supporting the growth prospects of Tourism stocks such as SGS, Catering and Seera. KEY POINTS: * According to Bloomberg, GACA announced to reduc...
Q1 2022 results * Revenue stood at SAR425mn, up 13.9% yoy, (-3.3% qoq), The yoy growth is due to business recovery post COVID-19, while the qoq decline is due to the impact of Omicron. * Gross profit came in at SAR48mn, down 17.5% yoy (-31.6% qoq) with a margin of 11.2% in Q1 22 contracting from 15.4% and 15.8% in Q1 21 and Q4 21 respectively. * The yoy decline in gross margins is due to SANED suspensions while the qoq decline is due to lower revenues in Q1 22. * Operating los...
We remain Overweight on SGS with a revised PT of SAR39.5. After two challenging years, the travel industry is set for a major comeback. We believe SGS is well-positioned to record a strong recovery driven by 1) the positive outlook of the Saudi Aviation and Tourism sectors, 2) the pick-up in religious tourism, and 3) SGS’s strong cost control measures. We expect SGS to break even in 2022f and reach a net income of SAR417mn by 2024f. Although the stock trades at 2023f P/E of 20.7x, in line wit...
SGS reported a net loss of SAR43.5mn in Q3 21 vs a loss of SAR86.8mn in Q3 20 and a loss of SAR93.2mn in Q2 21. This compares to the SNB Capital, and consensus estimates of losses of SAR57.9mn and SAR44.8mn, respectively. We highlight that although it is the 7th consecutive quarterly loss for SGS, the decline in losses is a sign of the ongoing recovery of the business from the impact of COVID-19. The 57.0% yoy growth in revenues was offset by 1) increase in operating costs by SAR85.6mn due to...
SGS reported a loss of SAR93.2mn in Q2 21 vs a loss of SAR197.9mn in Q2 21 and a loss of SAR16.7mn in Q1 21. This is compared to the SNB Capital and the consensus estimates of losses of SAR83.9mn and SAR40.9mn, respectively. This is the 6th consecutive loss due to the impact of COVID-19. We believe higher losses are due to: 1) the end of SANED program which increased costs by SAR82mn; and 2) an increase in losses from JVs and investments. * Revenues increased by 226% yoy (+0.5% qoq) to SAR37...
We maintain our Overweight rating on SGS with a revised PT of SAR34.5. The long-term outlook for the Saudi travel sector remains positive due to the expansion of domestic airline fleets along with GACA and PIF strategies and the growth of Hajj & Umrah. Although COVID-19 creates short-term headwinds, we believe SGS cost control initiative will ensure a faster earnings recovery. The stock is trading at 2022f PE of 18.9x, lower than the global peer average of 20.9x. GACA and PIF strategies suppo...
SGS reported losses for the 2nd consecutive quarter. Net loss came in at SAR198mn vs a net profit of SAR124mn in Q2 19 and net loss of SAR52mn in Q1 20. This compares with the NCBC and consensus estimates of net losses of SAR175mn and SAR187mn, respectively. The loss is mainly attributed to the impact of COVID-19 lockdown on the aviation services in Saudi. The company said that cost reduction initiatives helped the company to reduce its losses from SAR408mn. We await for the full financials t...
SGS reported a better-than-expected set of Q2 19 results with a net income of SAR124mn, up 9.9% yoy and 19% qoq. The results were higher than NCBC and consensus estimates by 11.0% and 4.6%, respectively. We believe the better-than-expected results are mainly driven by lower operating costs which include 1) lower provisions and 2) cost of living allowance of SAR16.8mn reported in Q2 18.
We maintain our Overweight rating on SGS with a revised PT of SAR37.2 (from SAR44.5). Operating efficiency, growth in flight activity and attractive dividend yield of 6.1% are the key advantages of the stock. However, the recent development of delayed payments from Flynas is a key risk going forward. The stock is trading at PE 12.8x, lower than peer group average of 15.4x.
SGS reported an inline set of Q1 19 results with net income of SAR104mn, declining -2.4% yoy (up +84.7% qoq). The results were 12.1% higher than the consensus estimates of SAR92mn. Net sales were slightly lower than expected, but higher margins mitigated the impact. The stock is trading at 2019f PE of 13.2x, lower than the peer group average of 15.4x
SGS reported weaker-than-expected results with a net income of SAR56.4mn in Q4 18, down 12.0% yoy and 39.2% qoq. Moreover, this is significantly lower than the NCBC and consensus estimates of SAR87.2mn and SAR65mn, respectively. The deviation is primarily due to provisions. Adjusting for provisions, net income stood at SAR124mn. We have a PT of SAR44.5 for SGS, but in light of the disappointing results, we will revisit our estimates once full financials are released.
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