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Kayan's "surprising" results beat estimates

Kayan's "surprising" results beat estimates
NCB Capital remained “neutral” on Kayan (Photo Archive)
SAUDI KAYAN
2350
-1.13% 10.46 -0.12

Mubasher: Saudi Kayan Petrochemical Co. reported a “surprising set” of results during the second quarter of 2016 for the first time in five quarters and the highest since inception, according to a report by NCB Capital.

The company’s net income reached SAR 91 million in Q2-16 compared to the NCB Capital and consensus estimates of a net loss of SAR 178 million and SAR 184 million respectively.

Based on NCB Capital’s calculations, gross margins came in at 18.5% in Q2-16, the highest since inception.

“The variance is attributed to higher operating rates, a potential sale of inventories combined with lower cost of production,” the report highlighted.

NCB Capital remained “neutral” on Kayan's stock with a price target of SAR 6.4. 

On a year-on-year basis, Saudi-listed firm’s net income was backed by higher sales volumes, in addition to a decline in feedstock cost and improved efficiency, and zakat expenses.

Based on Yansab, Saudi Arabian Fertilisers Company (SAFCO) and Kayan results, NCB Capital raised its net income estimates for SABIC by 5.9% to SAR 3.9 billion.