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Aljazira Capital maintains “overweight” on Advanced Petrochemical

Aljazira Capital maintains “overweight” on Advanced Petrochemical
Advanced Petrochemical’s net profits reached SAR 162 million in Q1-19
ADVANCED
2330
0.27% 37.40 0.10

Riyadh – Mubasher: Aljazira Capital has maintained its “overweight” recommendation on Advanced Petrochemical’s stock with a target price at SAR 61.0 a share.

During the first quarter of 2019, Advanced Petrochemical’s net profits reached SAR 162 million, with earnings per share (EPS) of SAR 0.82, compared to the research firm’s estimate of SAR 160.4 million, according to a report released on Sunday.

The year-on-year net profit growth in Q1-19 was ascribed to an increase in volumetric sales due to scheduled shutdown of polypropylene (PP) and propane dehydrogenation (PDH) plants in Q1-18, higher contribution from SK Advanced petrochemical, and decreased propane and outsourced propylene prices.

Total profit margin expanded by 150 basis points (bps) to 29.93% from 28.43% in Q4-18 on the back of a reduction in propane polypropylene cost margin, with further expectations for improvement after Q1-19, supported by the low feedstock prices and projected recovery in polypropylene prices.

In January, Advanced Petrochemical reported a 13.6% year-on-year increase in net profits after zakat and tax in 2018, logging SAR 717 million, compared to SAR 631.12 million.