Riyadh – Mubasher: Albilad Capital said its placed an “Overweight” rating on National Agricultural Development Co. (Nadec), raising the stock’s target price to SAR 23.8 from SAR 22.7, with an upside potential of 12.8% from yesterday’s closing price of SAR 21.10.

The company posted SAR 25.2 million net profit for the first quarter of 2016, down 3.52% year-on-year from SAR 26.16 million. These earnings beat Albilad estimates of SAR 17 million.

The slight decrease in bottom line -despite the increases of energy and water prices– was triggered by the slump in production cost and the improvement in sales mix. The bottom line for Q1 2016 outstripped our estimate of SAR 17 million. Nadec managed to overcome the impacts of the increase in the cost of energy and water through lower production cost. Nadec capitalized on the slump in the prices of packaging materials in Q1 2016, according to the research firm.