Earnings Report /
Saudi Arabia

SABIC Agri-Nutrients: Lower associate income offset by positive zakat; reiterate Neutral

    Iyad Khalid Ghulam
    Iyad Khalid Ghulam

    Vice President, Senior Equity Research Analyst

    SNB Capital
    23 October 2019
    Published by

    SAFCO reported an in-line set of Q3 19 results with a net income of SAR414mn, declining 20.7% yoy (+8.9% qoq). This compares with the consensus estimates of SAR420mn. 

    We believe the lower-than-expected income from Ibn Al-Baytar was offset by positive zakat provision.

    We are Neutral on SAFCO with a PT of SAR77.6. Although supply is expected to be limited in the future, higher exports from China is a key risk on urea prices. The stock is trading at 2019f PE of 21.1x, higher than the regional peer group average of 14.9x.