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Al-Rajhi maintains Maaden PT

Al-Rajhi maintains Maaden PT
(Photo Credit: Arabianeye-Reuters)

Riyadh-Mubasher: Al-Rajhi Capital maintained the price target (PT) of Saudi Arabian Mining Company (Maaden) at SAR 35 per share, although the company’s net profit in the second quarter of 2016 was below the Al-Rajhi and consensus estimates.

The research firm attributed the difference between its estimates and actual profits to weak pricing environment and rising finance cost, according to Al-Rajhi’s report issued on Sunday.

“The stock performed in-line with our expectations appreciating 17% over the last 3 months, the report highlighted, adding that “We maintain our target price, however, due to stock price appreciation, we downgrade the rating to Neutral.”

The report also indicated that though commodity prices posted a modest recovery on a sequential basis in Q2-16, the pricing environment remains uncertain. In addition, the rising SAIBOR (Saudi Arabia Interbank Offered Rate) will also impact the company’s profitability.

The management is focusing on raising its production capacities and increasing sales volumes.

Furthermore, Maaden is continuing its five-year cost saving program to optimize operational cost across all its segments to drive profitability, the report added.