Mubasher: Yanbu National Petrochemical Company (Yansab) achieved a “strong” set of results for the second quarter of 2016, with net profits tripled to SAR 689 million, according to Al Rajhi Capital Research.

The company’s Q2-16 profits rose 203% year-on-year and 71.5% quarter-on-quarter, beating Al Rajhi’s and consensus estimates by a wide margin for the second consecutive quarter.

The sharp rise in bottom-line, despite lower product prices y-o-y, can be attributed to low base of Q2-15 on the back of maintenance shutdown and sharp decline in some feedstock prices compared to last year.

However, Al Rajhi believes that the main surprise was on account of higher than expected sale volume during the quarter, and lower-than-expected COGS - other than raw materials.

The strong sequential growth is likely not to be repeated in the next quarter, the report said, adding that Al Rajhi revised upwards its estimates on Yansab based on the latest developments.

Using a weighted average of DCF and relative valuation, Al Rajhi set Yansab’s target price at SAR48 and rated “Overweight” on the company’s stock

“The stock offers an attractive dividend yield of 7%, assuming dividend of SAR3 per share for 2016,” the report highlighted.