Earnings Forecasts Q4 2014
4 January 2015
Earnings Forecasts Q4 2014 Banking sector Summary The report shows our Fourth quarter earnings estimates for companies under coverage.
Accumulated net profits for commercial banks operating in Saudi Arabia hit SAR 37.21 billion in the first elven months of 2014, up 9% YoY. Bottom line is estimated to grow 14% in 2014 reaching SAR 40.59 billion up from SAR 35.7 billion in 2013. Total assets of the sector are expected to soar 12% in 2014 coming in at SAR 2,120 billion, whereas customers deposits are estimated at SAR 1,584 billion, up 13% YoY. In addition, we expect loans to the private sector to conclude the year at the level of SAR 1,258 billion up from SAR 1,124 billion in 2013.
Petrochemical sector
For more information, you may contact: Turki Fadaak Research & Advisory Manager E-mail: [email protected] Or Albilad Capital Head Office: Tel.: +966 11203 9892 Fax: +966 11203 9899 P.O. Box : 140 Riyadh: 11411 Our website: www.albilad-capital.com/en/research
Prices of petrochemical products witnessed a remarkable downward trend in Q4 2014 in parallel with record low oil prices in five years. Average ethylene price dropped from USD1,493/ton in Q3 2014 to USD 1,177/ton, while average propylene price tumbled from USD1,361/ ton in Q3 2014 to USD1,016/ton in Q4 2014. Regarding other products, average price of polyethylene fell from USD1,591 to USD1,416/ton. In addition, polypropylene price averaged USD1,370/ton down from USD1,533. Meanwhile, average methanol price (China) culminated at USD349/ton from USD325/ton in Q3 2014. Except for urea, prices of major fertilizers shifted upwards in Q4 2014 with the average price for ammonia increasing from USD500/ton in Q3 2014 to USD595/ton in Q4 2014, while diammonium phosphate price (DAP) averaged USD 486/ton, up from USD475/ton in Q3 2014. As for urea, the average price in Q4 hovered at USD321/ton down from USD337/ton in Q3 2014.
Telecom Sector The first day of Eid al-Adha in 2014 coincided with 4th October 2014, accordingly a significant portion of the strong revenues from pilgrimage has been included in Q3 FY14 result unlike 2013 where revenues of the season has been mostly in Q4.
Retail Sector Following a slowdown in the third quarter, we expect the retail sector to manifest better performance in Q4 2014. In the fourth quarter, Othaim Markets receives incentives from achieving annual sales targets for the whole year, a factor that boosts Q4 bottom line. Accordingly, we expect Q4 FY14 net income to hit SAR 72.4 million up from SAR 42.3 million in Q3 2014. Over an annual basis, Q4 bottom line is estimated to grow 3.5% YoY. Meanwhile, Jarir Marketing is expected to augment its net income by 31.71% YoY in Q4 2014 driven by the expansions in the distribution channel, sales of IPhone 6 and normal growth in old outlets. On the other hand, Extra disclosed that 8 outlets have been closed by the Ministry of Trade in the last 10 days in November 2014 due to violations related to some promotions. Extra estimated lost sales and net income for the shutdown at SAR 150 million and SAR 27 million, respectively, thus we expect Q4 FY14 bottom line to tumble 46% posting SAR 31.5 million down from SAR 58.4 million in Q4 2013.
Cement sector Cement sales recover in Q4 following tough weather, summer vacations and Ramadan in Q3. Nevertheless, cement sales were sluggish in Q4 2014, coupled with a record clinker inventory of 21.4 million tons, and exports restrictions. Cement dispatches are estimated at 56.05 million tons in 2014, up from 55.3 million tons in 2013. Meanwhile, local production is estimated to increase from 55.7 million tons in 2013 to 56.71 million tons in 2014. 1
Earnings Forecasts Q4 2014
4 January 2015
The Following Table Illustrates our Forecasts for The Fourth Quarter of 2014
Code / Sector– SAR mn
Company
Q4 2014E Q4 2013A
Growth
FY 2014E FY 2013A
Growth
Banks and Financial Services Al Rajhi
1,600
1,546
3%
6,915
7,438
(7%)
2010
SABIC
5,210
6,157
(15%)
24,287
25,278
(4%)
2020
SAFCO
780
802
(3%)
3,173
3,160
0%
2290
YANSAB
402
442
(9%)
2,261
2,645
(15%)
3020
YSCC
153
178
(14%)
672
870
(23%)
3030
Saudi Cement
252
256
(2%)
1,058
1,124
(6%)
3060
Yanbu Cement
204
160
27%
813
821
(1%)
4001
A. Othaim Market
72
70
3%
213
193
11%
4002
Mouwasat
60
50
19%
249
201
24%
4003
Extra
31
58
(47%)
144
167
(14%)
4004
Dallah Health
53
50
5%
150
137
10%
4190
Jarir
210
160
31%
749
653
15%
2050
Savola Group
615
564
9%
2,252
1,704
32%
2280
Almarai
430
373
15%
1,675
1,502
11%
6002
Herfy Foods
57
51
11%
214
191
12%
6004
Catering
144
127
13%
624
569
10%
6010
NADEC
15
15
1%
101
100
1%
1120
Petrochemical Industries
Cement
Retail
Agriculture & Food Industries
Telecom & Information Technology 7010
STC
3,567
3,623
(2%)
12,132
9,897
23%
7020
Etihad Etisalat*
1,300
1,354
(4%)
4,482
6,677
(33%)
7030
ZAIN KSA
(370)
(462)
(20%)
(1,439)
(1,651)
(13%)
MAADEN
558
(29)
(2010%)
1,539
1,682
(9%)
Bahri
206
276
(25%)
616
752
(18%)
Industrial Investment 1211
Transport 4030
*The figure does not include any provisions related to the dispute with Zain as well as any material unusual item.
2
Earnings Forecasts Q4 2014
4 January 2015
Albilad Capital Client Services E-mail: [email protected] Tel: +966-11-203-9888 Toll-free: 800-116-0001
Research & Advisory E-mail: [email protected] Tel: +966-11-203-9892 Website: www.albilad-capital.com/en/research Brokerage E-mail: [email protected] Tel: +966-11-203-9840
Asset Management E-mail: [email protected] Tel: +966-11-203-9870
Investment Banking E-mail: [email protected] Tel: +966-11-203-9859
Disclaimer AlBilad Capital exerted utmost efforts to ensure that the information included in this report is accurate and correct. However, AlBilad Capital, its managers, and staff bear no liability whether explicitly or implicitly for the content of the report and no legal responsibility, whether directly or indirectly, for any results based on it. This report should not be reproduced, redistributed, or sent directly or indirectly to any other party or published in full or in part for any purpose whatsoever without a prior written permission from AlBilad Capital. We would also like to note that this information in no way constitutes a recommendation to buy or sell banknotes or make any investment decisions. Any investment act taken by an investor based fully or partially on this report is the complete responsibility of the investor. This report is not meant to be used or seen as advice or an option or any other measure to be taken in the future. We recommend consulting a qualified investment advisor before investing in these investment tools. AlBilad Capital preserves all rights associated with this report.
3
Earnings Forecasts Q4 2014 Banking sector Summary The report shows our Fourth quarter earnings estimates for companies under coverage.
Accumulated net profits for commercial banks operating in Saudi Arabia hit SAR 37.21 billion in the first elven months of 2014, up 9% YoY. Bottom line is estimated to grow 14% in 2014 reaching SAR 40.59 billion up from SAR 35.7 billion in 2013. Total assets of the sector are expected to soar 12% in 2014 coming in at SAR 2,120 billion, whereas customers deposits are estimated at SAR 1,584 billion, up 13% YoY. In addition, we expect loans to the private sector to conclude the year at the level of SAR 1,258 billion up from SAR 1,124 billion in 2013.
Petrochemical sector
For more information, you may contact: Turki Fadaak Research & Advisory Manager E-mail: [email protected] Or Albilad Capital Head Office: Tel.: +966 11203 9892 Fax: +966 11203 9899 P.O. Box : 140 Riyadh: 11411 Our website: www.albilad-capital.com/en/research
Prices of petrochemical products witnessed a remarkable downward trend in Q4 2014 in parallel with record low oil prices in five years. Average ethylene price dropped from USD1,493/ton in Q3 2014 to USD 1,177/ton, while average propylene price tumbled from USD1,361/ ton in Q3 2014 to USD1,016/ton in Q4 2014. Regarding other products, average price of polyethylene fell from USD1,591 to USD1,416/ton. In addition, polypropylene price averaged USD1,370/ton down from USD1,533. Meanwhile, average methanol price (China) culminated at USD349/ton from USD325/ton in Q3 2014. Except for urea, prices of major fertilizers shifted upwards in Q4 2014 with the average price for ammonia increasing from USD500/ton in Q3 2014 to USD595/ton in Q4 2014, while diammonium phosphate price (DAP) averaged USD 486/ton, up from USD475/ton in Q3 2014. As for urea, the average price in Q4 hovered at USD321/ton down from USD337/ton in Q3 2014.
Telecom Sector The first day of Eid al-Adha in 2014 coincided with 4th October 2014, accordingly a significant portion of the strong revenues from pilgrimage has been included in Q3 FY14 result unlike 2013 where revenues of the season has been mostly in Q4.
Retail Sector Following a slowdown in the third quarter, we expect the retail sector to manifest better performance in Q4 2014. In the fourth quarter, Othaim Markets receives incentives from achieving annual sales targets for the whole year, a factor that boosts Q4 bottom line. Accordingly, we expect Q4 FY14 net income to hit SAR 72.4 million up from SAR 42.3 million in Q3 2014. Over an annual basis, Q4 bottom line is estimated to grow 3.5% YoY. Meanwhile, Jarir Marketing is expected to augment its net income by 31.71% YoY in Q4 2014 driven by the expansions in the distribution channel, sales of IPhone 6 and normal growth in old outlets. On the other hand, Extra disclosed that 8 outlets have been closed by the Ministry of Trade in the last 10 days in November 2014 due to violations related to some promotions. Extra estimated lost sales and net income for the shutdown at SAR 150 million and SAR 27 million, respectively, thus we expect Q4 FY14 bottom line to tumble 46% posting SAR 31.5 million down from SAR 58.4 million in Q4 2013.
Cement sector Cement sales recover in Q4 following tough weather, summer vacations and Ramadan in Q3. Nevertheless, cement sales were sluggish in Q4 2014, coupled with a record clinker inventory of 21.4 million tons, and exports restrictions. Cement dispatches are estimated at 56.05 million tons in 2014, up from 55.3 million tons in 2013. Meanwhile, local production is estimated to increase from 55.7 million tons in 2013 to 56.71 million tons in 2014. 1
Earnings Forecasts Q4 2014
4 January 2015
The Following Table Illustrates our Forecasts for The Fourth Quarter of 2014
Code / Sector– SAR mn
Company
Q4 2014E Q4 2013A
Growth
FY 2014E FY 2013A
Growth
Banks and Financial Services Al Rajhi
1,600
1,546
3%
6,915
7,438
(7%)
2010
SABIC
5,210
6,157
(15%)
24,287
25,278
(4%)
2020
SAFCO
780
802
(3%)
3,173
3,160
0%
2290
YANSAB
402
442
(9%)
2,261
2,645
(15%)
3020
YSCC
153
178
(14%)
672
870
(23%)
3030
Saudi Cement
252
256
(2%)
1,058
1,124
(6%)
3060
Yanbu Cement
204
160
27%
813
821
(1%)
4001
A. Othaim Market
72
70
3%
213
193
11%
4002
Mouwasat
60
50
19%
249
201
24%
4003
Extra
31
58
(47%)
144
167
(14%)
4004
Dallah Health
53
50
5%
150
137
10%
4190
Jarir
210
160
31%
749
653
15%
2050
Savola Group
615
564
9%
2,252
1,704
32%
2280
Almarai
430
373
15%
1,675
1,502
11%
6002
Herfy Foods
57
51
11%
214
191
12%
6004
Catering
144
127
13%
624
569
10%
6010
NADEC
15
15
1%
101
100
1%
1120
Petrochemical Industries
Cement
Retail
Agriculture & Food Industries
Telecom & Information Technology 7010
STC
3,567
3,623
(2%)
12,132
9,897
23%
7020
Etihad Etisalat*
1,300
1,354
(4%)
4,482
6,677
(33%)
7030
ZAIN KSA
(370)
(462)
(20%)
(1,439)
(1,651)
(13%)
MAADEN
558
(29)
(2010%)
1,539
1,682
(9%)
Bahri
206
276
(25%)
616
752
(18%)
Industrial Investment 1211
Transport 4030
*The figure does not include any provisions related to the dispute with Zain as well as any material unusual item.
2
Earnings Forecasts Q4 2014
4 January 2015
Albilad Capital Client Services E-mail: [email protected] Tel: +966-11-203-9888 Toll-free: 800-116-0001
Research & Advisory E-mail: [email protected] Tel: +966-11-203-9892 Website: www.albilad-capital.com/en/research Brokerage E-mail: [email protected] Tel: +966-11-203-9840
Asset Management E-mail: [email protected] Tel: +966-11-203-9870
Investment Banking E-mail: [email protected] Tel: +966-11-203-9859
Disclaimer AlBilad Capital exerted utmost efforts to ensure that the information included in this report is accurate and correct. However, AlBilad Capital, its managers, and staff bear no liability whether explicitly or implicitly for the content of the report and no legal responsibility, whether directly or indirectly, for any results based on it. This report should not be reproduced, redistributed, or sent directly or indirectly to any other party or published in full or in part for any purpose whatsoever without a prior written permission from AlBilad Capital. We would also like to note that this information in no way constitutes a recommendation to buy or sell banknotes or make any investment decisions. Any investment act taken by an investor based fully or partially on this report is the complete responsibility of the investor. This report is not meant to be used or seen as advice or an option or any other measure to be taken in the future. We recommend consulting a qualified investment advisor before investing in these investment tools. AlBilad Capital preserves all rights associated with this report.
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