Mubasher: Saudi Arabian Fertilizer Co.’s (SAFCO) profits fell 50% y-o-y to SAR 299 million in the second quarter of 2016, in line with consensus estimates, yet higher than Al Rajhi Capital Research’s forecasts.

The Q2-16 profit decline resulted from the continuous fall in product prices and higher feedstock costs.

The company’s gross and operating profits came in line with Al Rajhi’s estimates, suggesting the higher income from associates might have led to the outperformance at the net profit level, according to a report by Al Rajhi.

“Taking into account the latest developments, we have lowered our estimates on the company,” the report highlighted.

The projected SAR 3 per share dividend for 2016 implies lower dividend yield of 5%, as dividend was from SAR 6 per share in 2015, due to lower profitability.

AlRajhi set SAFCO’s target price at SAR 51.50, with “Underweight” rating.