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Albilad: Yansab not to be affected by new feedstock prices

Albilad: Yansab not to be affected by new feedstock prices
Yansab’s net income robustly soared in Q2-16 - (Photo Archive)
YANSAB
2290
-2.69% 38.00 -1.05

Mubasher - Riyadh: Albilad Capital said on Sunday it does not  expect Yanbu National Petrochemical Company (Yansab) to be impacted by the government decisions to adjust feedstock prices in 2016.

“After revisiting our assumptions related to revenues and profit margins given the Q2 interim figures, our fair value is upgraded to SAR 47.95 per share thus revealing an upside potential of 8.14% over the share price.” Albilad’s report indicated.

Yansab’s net income “robustly soared” in the second quarter of 2016, recording SAR 689 million, beating the analysts’ consensus of SAR 432 million.

Profits edged up 203% y-o-y and 72% q-o-q, making the total bottom line rise 113% y-o-y to reach SAR 1.091 billion  in H1-16 , according to the report.

The increase in net profit is attributable to rising volume sales upon the completion of protective maintenance works for the company’s plants in Q2-15, in addition to a decrease in some feedstock prices despite lower average sales prices for most of the products.

Albilad’s report said that propane and ethane prices will increase in Q2 and Q4 of 2016 respectively.

Yansab had previously predicted a 1% additional cost from the price adjustments of feedstock in 2016 as the new prices will not be applied until 7 years and 90 days from the start of the actual supply of feedstock, the report added.