Yanbu National Petrochemicals
Yanbu National Petrochemicals Petrochemicals – Industrial YANSAB AB: Saudi Arabia 2 February 2016
Rating
OVERWEIGHT
Target price
SAR38.8 (26% upside)
Current price
SAR30.7
Research Department Pritish K. Devassy, CFA Tel 966 11 211 9370, [email protected]
Key themes & implications Yansab is currently under pressure from the commodity down-cycle as well as an upward revision in feedstock and utility prices. Nevertheless, we believe the company will generate enough free cash flow in 2016 to turn net cash positive from the current net debt of ~SAR650mn. This, along with low capex requirement will allow the company to maintain a high dividend payout ratio. The stock, currently, offers a dividend yield of 4.9% on our 2016 dividend forecast. We expect the company’s earnings growth to resume from 2017, as product prices recover in line with crude oil prices. We have an Overweight rating with a target price of SAR38.8. Share information Market cap (SAR/US$)
18.59bn / 4.956bn
52-week range
24.40 - 57.26
Daily avg volume (US$)
mn
Shares outstanding
562.5mn
Free float (est)
Absolute Relative to index
1M
3M
12M
-8%
-22.6%
-33.9%
10.5%
-2.6%
2.2%
Major Shareholder: SABIC
51.0%
GOSI
11.9%
Valuation 12/16E
12/17E
12/18E
P/E (x)
12/15A 15.4
22.3
17.2
9.1
P/B (x)
1.2
1.2
1.2
1.2
EV/EBITDA (x)
7.2
8.1
7.2
4.9
Dividend Yield
6.1%
4.5%
5.5%
9.2%
Source: Company data, Al Rajhi Capital
Performance Price Close
Relative to TADAWUL FF (RHS)
61.0 56.0 51.0 46.0 41.0 36.0 31.0 26.0 21.0
RSI10
OW: Dividend play Yansab has been one of the best performers in the last two weeks with the stock up ~18% vs petchem index, up 2.1%. In Q4, the company beat our as well as consensus estimates on better-than-expected utilization rates. For 2016, we expect product prices to decline as compared to 2015, and costs to increase owing to the increased feedstock prices. We expect earnings growth to resume from 2017, as product prices are forecast to improve in-line with the recovery in crude oil prices. The company operates at high utilization rates and generates strong free cash flow on the back of its low capex requirements, which will allow it to maintain a high dividend payout ratio. The stock offers a dividend yield of 4.9% on our current dividend forecast of SAR1.5 per share for 2016. Based on our valuation methodology using a mix of DCF, DDM and relative valuation methods, we arrive at a target price of SAR38.8 for Yansab and rate the stock Overweight.
37%
Performance
70 30 -10 01/15
Yanbu National Petrochemicals
125.0 119.4 113.8 108.1 102.5 96.9 91.3 85.6 80.0
Q4 2015 results beat estimates: Though Yansab reported a 20% y-o-y decline in revenue and a 36% decrease in net profit in Q4 2015, the numbers were better than our as well as consensus estimates. Net profit stood at SAR393mn vs consensus estimate at SAR307mn. The company was able to maintain a healthy operating profit margin of 26.1% in Q4 2015 (Q4 2014: 31.1%), despite a sharp fall in product prices (down 20-40% y-o-y). We believe the profitability was supported by a decline in naphtha prices and higher than expected utilization rates. Dividend play: Healthy cash flow from operations and low capex requirements will enable the company to become net cash positive by 2016. This would increase its ability to increase dividend payouts in the future. In 2015, it paid a dividend of SAR2 per share, translating to 93% dividend payout ratio. For 2016, we expect 100% payout ratio, which translates to dividend per share of SAR1.5 (dividend yield of c5%). Revision in feedstock prices to have limited impact: The revision in feedstock costs (ethane: 133%, natural gas/methane: 67%) will not lead to a significant jump in costs for the company. Yansab estimated that production costs are likely to increase by ~6.5% as a result of the revision in energy and water tariffs. We believe this is would be partly negated by the decline in propane and gasoline prices. Though margins would come under pressure, the impact would not be as significant as expected earlier.
Period End (SAR) 05/15
08/15
11/15
Source: Bloomberg, Company data, Al Rajhi Capital
Company summary
12/14A
12/15A
12/16E
12/17E
12/18E
Revenue (mn)
9,511
6,911
6,668
6,709
7,953
Revenue Growth Gross profit margin EBITDA margin
1.7% 32.5% 43.4%
-27.3% 25.4% 38.5%
-3.5% 18.3% 34.1%
0.6% 21.8% 36.1%
18.5% 30.8% 41.6%
Net profit margin EPS EPS Growth ROE ROCE Capex/Sales
26.1% 4.40 -6.3% 16.2% 14.5% 1.2%
17.5% 2.15 -51.3% 7.8% 8.6% 11.5%
12.5% 1.48 -30.9% 5.4% 5.8% 3.5%
16.1% 1.92 29.4% 7.0% 7.3% 3.0%
25.6% 3.61 88.2% 13.1% 13.2% 2.0%
Source: Company data, Al Rajhi Capital
Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer.
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Current depressed scenario provides good long-term opportunity: Yansab’s stock price plunged more than 25% over the last two months to SAR30.7. The company’s earnings fell ~50% y-o-y in 2015 because of pressure on product prices and a maintenance shutdown. While we expect no shutdowns in 2016, product prices are expected to remain subdued in 2016 and feedstock costs will be higher post the subsidy cuts. On the whole, we expect earnings to recover from 2017. We have valued the company based on a weighted average of the Relative Valuation (PE), DCF and DDM methods to arrive at a target price of SAR38.8 on Yansab. We believe the current negative sentiment scenario provides a good opportunity for long-term investors to start accumulating the stock. We believe there is further upside risk to the stock, if crude prices recover faster than expected. We assign an Overweight rating to the stock. Oil: Further downside possible, but not sustainable for long: Crude oil prices have fallen sharply over the past few months after the OPEC announced its strategy to maintain their market share. Moreover, crude prices came under further pressure as sanctions against Iran were lifted and the country’s supply was added to an already oversupplied market. We believe Saudi Arabia’s strategy to drown out high-cost crude oil producers is working, and the supply/demand mismatch should balance out by late 2016 to early 2017. There are already signs of slowing upstream investments and reduction in oil production from various countries, including the US. Figure 1 Brent Crude and Naphtha Prices move in tandem US$/ton
US$/bbl
1,200
120
1,000
100
800
80
600
60
400
40
200
20
0
0 Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Naphtha (RHS)
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Brent Crude (LHS)
Source: Bloomberg, Al Rajhi Capital
However, we expect crude prices to be volatile in the near-term. They can decline further owing to market sentiments and slow growth in key markets like China, before stabilizing in late 2016. Product prices to remain weak in the near-term: Product prices have been under pressure for the last few months driven by the steep fall in crude prices (~31% y-o-y). We believe these product prices would continue to face headwinds in the near-term from the persistent weakness in oil prices and subdued demand growth from emerging markets. PE, PP and MEG prices have fallen ~18.5%, 28%, and ~22% y-o-y, respectively. We expect petrochemical product prices to remain weak in 2016, with average prices likely to decline 10-25% y-o-y. However, we expect prices to recover from 2017 in line with a likely recovery in crude oil prices.
Disclosures Please refer to the important disclosures at the back of this report.
2
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Figure 2 Ethylene Vs HDPE/LLDPE price movement
Figure 3 Propylene Vs Polypropylene price movement
US/ton 1,800
US/ton 1,800
1,600
1,600
1,400
1,400
1,200
1,200
1,000
1,000
800
800
600
600
400
400
200
200
0 Jan-14
Apr-14
Jul-14
Oct-14
Ethylene
Jan-15
Apr-15
HDPE
Jul-15
Title: Source: Please fill in the values above to have them entered in your report
0 Jan-14
Oct-15
Apr-14
Jul-14
LLDPE
Oct-14
Propylene
Source: Bloomberg, Al Rajhi Capital
Jan-15
Apr-15
Jul-15
Oct-15
Polypropylene
Source: Bloomberg, Al Rajhi Capital
Healthy utilization rates: Yansab has a history of strong and stable operations. As per our estimates, Yansab has been consistently operating at utilization rates in the range of 80-90%. In Q2 2015, the company took a 35 days maintenance shutdown at its Ethylene plant and 42 days shutdown at the MEG plant and is unlikely to have a shutdown in 2016. We believe the company has the ability to continue operating at the current rates and also has room to raise utilization, if demand picks up. Figure 4 Strong utilization rates 100% 90% 90% 80%
80%
83%
84%
Figure 5 Yansab feedstock cost compared to market price US$/mmbtu
Maintenance shutdown 80%
93%
2.5
80% 2
Title: Source: Please fill in the values above to have them entered in your report
70% 61% 60%
1.5
50% 1 40% 30%
0.5
20%
0
10%
NG Henry hub
Ethane
0% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 21015
Source: Company data, Al Rajhi Capital
Market
Yansab
Source: Bloomberg, Al Rajhi Capital
Discounted feedstock availability: Yansab receives feedstock at discounted prices from Saudi Aramco. Despite the sharp upward revision in energy prices, the company gets natural gas at ~40% discount to current market prices, while ethane is supplied at ~15% discount even during the current low commodity price scenario. Propane is supplied at a 20% discount to FOB Japan price (28% earlier). Thus, Yansab and other Saudi Petchem players continue to enjoy a competitive advantage over international peers, allowing them comparatively high profit margins. Based on our estimates, cost of raw materials constituted around 40% of the total cash costs for the company. By cash costs we mean the difference between Revenue and EBITDA for Yansab. We expect overall 7% y-o-y increase in COGS in 2016. By our estimate, gas/liquid feedstock mix is 46%/54% within the feedstock.
Disclosures Please refer to the important disclosures at the back of this report.
3
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Ability to increase pay-out Yansab is expected to turn into a net cash positive company in 2016, even assuming a dividend payout ratio of 100%. The company generates strong cash flow from operations and has minimum capex requirements currently. This makes it a very attractive stock for investors looking for stable dividends, not to mention our conservative estimates for 2016. Strong cash flow generation: Yansab generated SAR3.4bn cash flow from operations in 2015, which allowed it to reduce its net debt by ~65% y-o-y to SAR647mn, as it paid back debt to the tune of SAR1.46bn during the year. Cash flow from operations per share stood at SAR6.1 in 2015, down 15% y-o-y. The company’s net debt/EBITDA ratio stood at only 0.24x at the end of 2015. With its ability to generate strong cash flow, we believe the company is likely to turn net cash positive by 2016-end, even assuming a dividend payout ratio of 100%. Low capex requirements: SABIC is the parent company of Yansab and Yansab is a single project company. Therefore, we believe capacity additions will likely be spearheaded by the parent and not Yansab. Thus, capex requirements are expected to remain low in the foreseeable future. For 2015, the company’s capex witnessed a one-off jump to SAR793.8mn (from SAR118mn in 2014), which included spending on a housing project for employees. However, we expect this to normalize from 2016 onwards (SAR250mn-SAR200mn). Due to its strong cash flow generation and low capex commitments, we believe the company would not have difficulty in repaying its outstanding gross debt of ~SAR4bn, even in the current depressed scenario, while maintaining a strong dividend payout. Figure 6 Cash flow analysis 8.0 7.0
3.5
7.2 6.4
3.0
3.0 6.1
7.0 6.1
3.0
6.0 4.7
5.0
2.5 4.1
2.0
4.0
3.3
3.0
3.7 1.8
2.9
2.0
1.5
1.5
2.0 1.0
1.0
(0.3)
(0.2)
(1.4)
(0.4)
(0.4)
2013
2014
2015
2016E
2017E
-
0.5
(1.0) (2.0)
CFO/share
Capex/share
Free cash f low/share
DPS (RHS)
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
4
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Attractive valuations Yansab stock corrected 25% over the last two months, under pressure from the weakness in crude oil prices. We believe the sharp stock price fall provides a good opportunity for longterm investors to buy into a stock with stable operating performance and strong free cash flow. We have valued the company using different valuation methodologies – Relative Valuation (30% weight), Discounted Cash flow (40% weight), and Discounted Dividend (30% weight). Using a weighted average of the three valuation methods, we arrive at our target price of SAR38.8 on Yansab, which provides a potential upside of ~26% from the current market price. Hence, we raise our rating on Yansab to Overweight. PE Relative Valuation: On a PE basis, the stock is trading at a premium to its 3-year average as well as the sector’s 12-m forward PE ratio, indicating that the stock price has fallen less than earning expectations. This can primarily be attributed to its strong cash flow and high dividend paying ability. We believe a PE relative valuation is not a correct method to value companies in the current depressed commodity price scenario, as stock valuations also discount a commodity up-cycle, which can make them look expensive. Nevertheless, we have assigned a 30% weight to the PE valuation. We have used the industry’s 2016E average PE of 12x for Yansab, while the stock is currently trading at 20.7x our 2016 EPS estimate (the chart below uses Bloomberg consensus data). Figure 7 Historical 12m Forward PE movement 18 16 14 12 10 8 6 4 2 0 Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Petchem index
Jul-14 Yansab
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Yansab 3.yr avg
Source: Bloomberg, Al Rajhi Capital
DCF Valuation: We estimate Yansab’s earnings to be under pressure in 2016 due to increased energy prices and falling product prices. The impact is likely to be partially offset by falling prices of market-linked feedstock prices (naphtha, gasoline etc.) and managementdriven efficiency improvement initiatives. From 2017, we expect growth in earnings as product prices improve in line with recovery in crude oil prices. Using a WACC of ~12.5% and a long-term growth rate of 2%, we arrive at a target price of SAR54.6 for Yansab. We have given a weight of 40% to the DCF valuation method. DDM Valuation: Based on our dividend payment expectations over the next five years and assuming a long-term growth rate of 2%, along with a discount rate of ~12.5%, we arrive at a target price of SAR38.9 per share for Yansab. This provides a potential upside of 26% from the current market price. We have given a weight of 30% for the DDM valuation.
Disclosures Please refer to the important disclosures at the back of this report.
5
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Income Statement (SARmn) Revenue Cost of Goods Sold Gross Profit
12/14A
12/15A
12/16E
12/17E
9,511
6,911
6,668
6,709
12/18E 7,953
(6,424)
(5,154)
(5,448)
(5,248)
(5,500)
3,087
1,758
1,220
1,461
2,453
Government Charges S.G. & A. Costs Operating EBIT Cash Operating Costs EBITDA Depreciation and Amortisation Operating Profit Net financing income/(costs)
(244)
(218)
(215)
(214)
(234)
2,843
1,540
1,005
1,247
2,219
(5,381)
(4,251)
(4,396)
(4,288)
(4,648)
4,130
2,660
2,272
2,422
3,305
(1,287)
(1,120)
(1,267)
(1,174)
(1,087)
2,843
1,540
1,005
1,247
2,219
(213)
(156)
(103)
(86)
(68)
Forex and Related Gains
-
-
-
-
-
Provisions
-
-
-
-
-
Other Income
-
-
-
-
-
2,630
1,384
1,161
2,151
Other Expenses Net Profit Before Taxes Taxes Minority Interests
(152)
(176)
902 (68)
(81)
-
-
(118) -
-
-
2,478
1,207
834
1,080
2,032
(1,688)
(1,125)
(834)
(1,026)
(1,707)
-
-
-
-
-
12/14A
12/15A
12/16E
12/17E
12/18E
562.5
562.5
562.5
562.5
562.5
6.69
4.14
3.74
4.01
5.55
EPS (SAR)
4.405
2.146
1.483
1.920
3.613
DPS (SAR)
3.000
2.000
1.483
1.824
3.035
12/14A
12/15A
12/16E
12/17E
12/18E
1.7%
-27.3%
-3.5%
0.6%
18.5%
-4.3%
-43.1%
-30.6%
19.8%
67.9%
1.4%
-35.6%
-14.6%
6.6%
36.5%
Operating Profit Growth
-5.0%
-45.8%
-34.8%
24.2%
77.9%
Net Profit Growth
-6.3%
-51.3%
-30.9%
29.4%
88.2%
EPS Growth
-6.3%
-51.3%
-30.9%
29.4%
88.2%
Net profit available to shareholders Dividends Transfer to Capital Reserve
Adjusted Shares Out (mn) CFPS (SAR)
Growth Revenue Growth Gross Profit Growth EBITDA Growth
Margins
12/14A
12/15A
12/16E
12/17E
12/18E
Gross profit margin
32.5%
25.4%
18.3%
21.8%
30.8%
EBITDA margin
43.4%
38.5%
34.1%
36.1%
41.6%
Operating Margin
29.9%
22.3%
15.1%
18.6%
27.9%
Pretax profit margin
27.7%
20.0%
13.5%
17.3%
27.0%
Net profit margin
26.1%
17.5%
12.5%
16.1%
25.6%
Other Ratios
12/14A
12/15A
12/16E
12/17E
12/18E
ROCE
14.5%
8.6%
5.8%
7.3%
13.2%
ROIC
14.2%
7.7%
5.8%
7.6%
14.8%
ROE
16.2%
7.8%
5.4%
7.0%
13.1%
Effective Tax Rate
5.8%
12.7%
7.5%
7.0%
5.5%
Capex/Sales
1.2%
11.5%
3.5%
3.0%
2.0%
Dividend Payout Ratio
68.1%
93.2%
100.0%
95.0%
84.0%
Valuation Measures
12/14A
12/15A
12/16E
12/17E
12/18E
P/E (x)
7.5
15.4
22.3
17.2
9.1
P/CF (x)
4.9
8.0
8.8
8.2
6.0
P/B (x)
1.2
1.2
1.2
1.2
1.2
EV/Sales (x)
2.2
2.8
2.8
2.6
2.0
EV/EBITDA (x)
5.0
7.2
8.1
7.2
4.9
EV/EBIT (x)
7.2
12.5
18.4
13.9
7.3
EV/IC (x)
1.2
1.2
1.2
1.2
1.2
9.1%
6.1%
4.5%
5.5%
9.2%
Dividend Yield Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
6
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Balance Sheet (SARmn)
12/14A
12/15A
12/16E
12/17E
12/18E
Cash and Cash Equivalents
3,655
3,413
3,697
4,263
4,874
Current Receivables
2,525
1,844
1,867
1,812
2,028
Inventories
1,316
826
867
855
954
0
245
245
245
245
7,496
6,328
6,676
7,175
8,102
14,590
14,357
13,323
12,350
11,422
-
-
-
-
-
Other current assets Total Current Assets Fixed Assets Investments Goodwill Other Intangible Assets
192
80
80
80
80
Total Other Assets
189
203
203
203
203
Total Non-current Assets
14,971
14,641
13,607
12,634
11,706
Total Assets
22,467
20,968
20,282
19,809
19,808
1,462
1,464
1,464
1,464
1,464
Accounts Payable
222
201
167
201
278
Accrued Expenses
829
951
800
738
835
Zakat Payable
-
-
-
-
-
Dividends Payable
-
-
-
-
-
Other Current Liabilities
-
248
248
248
248
Short Term Debt
Total Current Liabilities
2,514
2,864
2,679
2,651
2,825
Long-Term Debt
4,060
2,596
2,096
1,596
1,096
Other LT Payables
-
-
-
-
-
Provisions
341
156
156
156
156
4,401
2,752
2,252
1,752
1,252
-
-
-
-
-
5,625
5,625
5,625
5,625
5,625
Total Non-current Liabilities Minority interests Paid-up share capital Total Reserves
9,927
9,727
9,727
9,781
10,106
Total Shareholders' Equity
15,552
15,352
15,352
15,406
15,731
Total Equity
15,552
15,352
15,352
15,406
15,731
Total Liabilities & Shareholders' Equity
22,467
20,968
20,282
19,809
19,808
Ratios
12/14A
12/15A
Net Debt (SARmn) Net Debt/EBITDA (x) Net Debt to Equity EBITDA Interest Cover (x) BVPS (SAR)
Cashflow Statement (SARmn)
12/16E
12/17E
12/18E
1,867
647
(137)
(1,203)
(2,314)
0.45
0.24
(0.06)
(0.50)
(0.70)
12.0%
4.2%
-0.9%
-7.8%
-14.7%
19.4
17.0
22.1
28.1
48.5
27.65
27.29
27.29
27.39
27.97
12/14A
12/15A
12/16E
12/17E
12/18E
Net Income before Tax & Minority Interest
2,630
1,384
902
1,161
2,151
Depreciation & Amortisation
1,287
1,120
1,267
1,174
1,087
Decrease in Working Capital
118
887
(250)
39
49
89
(68)
(81)
4,084
3,480
Other Operating Cashflow Cashflow from Operations Capital Expenditure
1,852
(119)
(794)
New Investments
(49)
(1,770)
-
-
Others
(22)
(14)
-
-
(190)
(2,578)
Cashflow from investing activities Net Operating Cashflow Dividends paid to ordinary shareholders Proceeds from issue of shares
3,894 (1,962)
902 (1,404)
(233)
2,294
(233) 1,618 (834)
(201)
(118) 2,978 (159) (159)
2,092
2,819
(1,026)
(1,707)
-
-
(1,298)
(1,462)
Effects of Exchange Rates on Cash
-
-
-
-
Other Financing Cashflow
-
-
-
-
-
(3,260)
(2,866)
(1,334)
(1,526)
(2,207)
Increase in Loans
Cashflow from financing activities Total cash generated
(500)
(500) -
284
566
611
3,021
3,655
3,413
3,697
4,263
Implied cash at end of year
3,655
1,692
3,697
4,263
4,874
12/14A
12/15A
12/16E
12/17E
12/18E
1.2%
11.5%
3.5%
3.0%
2.0%
Capex/Sales Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
(1,964)
(500)
Cash at beginning of period
Ratios
634
-
(201)
(141)
7
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
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Disclosures Please refer to the important disclosures at the back of this report.
8
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Disclaimer and additional disclosures for Equity Research Disclaimer This research document has been prepared by Al Rajhi Capital Company (“Al Rajhi Capital”) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi Capital’s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this research document. This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered, duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or which would subject Al Rajhi Capital or any of its affiliates to any registration or licensing requirement within such jurisdiction.
Explanation of Al Rajhi Capital’s rating system Al Rajhi Capital uses a three-tier rating system based on absolute upside or downside potential for all stocks under its coverage except financial stocks and those few other companies not compliant with Islamic Shariah law: "Overweight": Our target price is more than 10% above the current share price, and we expect the share price to reach the target on a 12 month time horizon. "Neutral": We expect the share price to settle at a level between 10% below the current share price and 10% above the current share price on a 12 month time horizon. "Underweight": Our target price is more than 10% below the current share price, and we expect the share price to reach the target on a 12 month time horizon. "Target price": We estimate target value per share for every stock we cover. This is normally based on widely accepted methods appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis. Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or if a company’s profits or operating performance exceed or fall short of our expectations.
Contact us Pritish Devassy, CFA Senior Research Analyst Tel : +966 11 211 9370 Email: [email protected] Al Rajhi Capital Research Department Head Office, King Fahad Road P.O. Box 5561, Riyadh 11432 Kingdom of Saudi Arabia Email: [email protected] Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 37/07068.
Disclosures Please refer to the important disclosures at the back of this report.
9
Rating
OVERWEIGHT
Target price
SAR38.8 (26% upside)
Current price
SAR30.7
Research Department Pritish K. Devassy, CFA Tel 966 11 211 9370, [email protected]
Key themes & implications Yansab is currently under pressure from the commodity down-cycle as well as an upward revision in feedstock and utility prices. Nevertheless, we believe the company will generate enough free cash flow in 2016 to turn net cash positive from the current net debt of ~SAR650mn. This, along with low capex requirement will allow the company to maintain a high dividend payout ratio. The stock, currently, offers a dividend yield of 4.9% on our 2016 dividend forecast. We expect the company’s earnings growth to resume from 2017, as product prices recover in line with crude oil prices. We have an Overweight rating with a target price of SAR38.8. Share information Market cap (SAR/US$)
18.59bn / 4.956bn
52-week range
24.40 - 57.26
Daily avg volume (US$)
mn
Shares outstanding
562.5mn
Free float (est)
Absolute Relative to index
1M
3M
12M
-8%
-22.6%
-33.9%
10.5%
-2.6%
2.2%
Major Shareholder: SABIC
51.0%
GOSI
11.9%
Valuation 12/16E
12/17E
12/18E
P/E (x)
12/15A 15.4
22.3
17.2
9.1
P/B (x)
1.2
1.2
1.2
1.2
EV/EBITDA (x)
7.2
8.1
7.2
4.9
Dividend Yield
6.1%
4.5%
5.5%
9.2%
Source: Company data, Al Rajhi Capital
Performance Price Close
Relative to TADAWUL FF (RHS)
61.0 56.0 51.0 46.0 41.0 36.0 31.0 26.0 21.0
RSI10
OW: Dividend play Yansab has been one of the best performers in the last two weeks with the stock up ~18% vs petchem index, up 2.1%. In Q4, the company beat our as well as consensus estimates on better-than-expected utilization rates. For 2016, we expect product prices to decline as compared to 2015, and costs to increase owing to the increased feedstock prices. We expect earnings growth to resume from 2017, as product prices are forecast to improve in-line with the recovery in crude oil prices. The company operates at high utilization rates and generates strong free cash flow on the back of its low capex requirements, which will allow it to maintain a high dividend payout ratio. The stock offers a dividend yield of 4.9% on our current dividend forecast of SAR1.5 per share for 2016. Based on our valuation methodology using a mix of DCF, DDM and relative valuation methods, we arrive at a target price of SAR38.8 for Yansab and rate the stock Overweight.
37%
Performance
70 30 -10 01/15
Yanbu National Petrochemicals
125.0 119.4 113.8 108.1 102.5 96.9 91.3 85.6 80.0
Q4 2015 results beat estimates: Though Yansab reported a 20% y-o-y decline in revenue and a 36% decrease in net profit in Q4 2015, the numbers were better than our as well as consensus estimates. Net profit stood at SAR393mn vs consensus estimate at SAR307mn. The company was able to maintain a healthy operating profit margin of 26.1% in Q4 2015 (Q4 2014: 31.1%), despite a sharp fall in product prices (down 20-40% y-o-y). We believe the profitability was supported by a decline in naphtha prices and higher than expected utilization rates. Dividend play: Healthy cash flow from operations and low capex requirements will enable the company to become net cash positive by 2016. This would increase its ability to increase dividend payouts in the future. In 2015, it paid a dividend of SAR2 per share, translating to 93% dividend payout ratio. For 2016, we expect 100% payout ratio, which translates to dividend per share of SAR1.5 (dividend yield of c5%). Revision in feedstock prices to have limited impact: The revision in feedstock costs (ethane: 133%, natural gas/methane: 67%) will not lead to a significant jump in costs for the company. Yansab estimated that production costs are likely to increase by ~6.5% as a result of the revision in energy and water tariffs. We believe this is would be partly negated by the decline in propane and gasoline prices. Though margins would come under pressure, the impact would not be as significant as expected earlier.
Period End (SAR) 05/15
08/15
11/15
Source: Bloomberg, Company data, Al Rajhi Capital
Company summary
12/14A
12/15A
12/16E
12/17E
12/18E
Revenue (mn)
9,511
6,911
6,668
6,709
7,953
Revenue Growth Gross profit margin EBITDA margin
1.7% 32.5% 43.4%
-27.3% 25.4% 38.5%
-3.5% 18.3% 34.1%
0.6% 21.8% 36.1%
18.5% 30.8% 41.6%
Net profit margin EPS EPS Growth ROE ROCE Capex/Sales
26.1% 4.40 -6.3% 16.2% 14.5% 1.2%
17.5% 2.15 -51.3% 7.8% 8.6% 11.5%
12.5% 1.48 -30.9% 5.4% 5.8% 3.5%
16.1% 1.92 29.4% 7.0% 7.3% 3.0%
25.6% 3.61 88.2% 13.1% 13.2% 2.0%
Source: Company data, Al Rajhi Capital
Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer.
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Current depressed scenario provides good long-term opportunity: Yansab’s stock price plunged more than 25% over the last two months to SAR30.7. The company’s earnings fell ~50% y-o-y in 2015 because of pressure on product prices and a maintenance shutdown. While we expect no shutdowns in 2016, product prices are expected to remain subdued in 2016 and feedstock costs will be higher post the subsidy cuts. On the whole, we expect earnings to recover from 2017. We have valued the company based on a weighted average of the Relative Valuation (PE), DCF and DDM methods to arrive at a target price of SAR38.8 on Yansab. We believe the current negative sentiment scenario provides a good opportunity for long-term investors to start accumulating the stock. We believe there is further upside risk to the stock, if crude prices recover faster than expected. We assign an Overweight rating to the stock. Oil: Further downside possible, but not sustainable for long: Crude oil prices have fallen sharply over the past few months after the OPEC announced its strategy to maintain their market share. Moreover, crude prices came under further pressure as sanctions against Iran were lifted and the country’s supply was added to an already oversupplied market. We believe Saudi Arabia’s strategy to drown out high-cost crude oil producers is working, and the supply/demand mismatch should balance out by late 2016 to early 2017. There are already signs of slowing upstream investments and reduction in oil production from various countries, including the US. Figure 1 Brent Crude and Naphtha Prices move in tandem US$/ton
US$/bbl
1,200
120
1,000
100
800
80
600
60
400
40
200
20
0
0 Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Naphtha (RHS)
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Brent Crude (LHS)
Source: Bloomberg, Al Rajhi Capital
However, we expect crude prices to be volatile in the near-term. They can decline further owing to market sentiments and slow growth in key markets like China, before stabilizing in late 2016. Product prices to remain weak in the near-term: Product prices have been under pressure for the last few months driven by the steep fall in crude prices (~31% y-o-y). We believe these product prices would continue to face headwinds in the near-term from the persistent weakness in oil prices and subdued demand growth from emerging markets. PE, PP and MEG prices have fallen ~18.5%, 28%, and ~22% y-o-y, respectively. We expect petrochemical product prices to remain weak in 2016, with average prices likely to decline 10-25% y-o-y. However, we expect prices to recover from 2017 in line with a likely recovery in crude oil prices.
Disclosures Please refer to the important disclosures at the back of this report.
2
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Figure 2 Ethylene Vs HDPE/LLDPE price movement
Figure 3 Propylene Vs Polypropylene price movement
US/ton 1,800
US/ton 1,800
1,600
1,600
1,400
1,400
1,200
1,200
1,000
1,000
800
800
600
600
400
400
200
200
0 Jan-14
Apr-14
Jul-14
Oct-14
Ethylene
Jan-15
Apr-15
HDPE
Jul-15
Title: Source: Please fill in the values above to have them entered in your report
0 Jan-14
Oct-15
Apr-14
Jul-14
LLDPE
Oct-14
Propylene
Source: Bloomberg, Al Rajhi Capital
Jan-15
Apr-15
Jul-15
Oct-15
Polypropylene
Source: Bloomberg, Al Rajhi Capital
Healthy utilization rates: Yansab has a history of strong and stable operations. As per our estimates, Yansab has been consistently operating at utilization rates in the range of 80-90%. In Q2 2015, the company took a 35 days maintenance shutdown at its Ethylene plant and 42 days shutdown at the MEG plant and is unlikely to have a shutdown in 2016. We believe the company has the ability to continue operating at the current rates and also has room to raise utilization, if demand picks up. Figure 4 Strong utilization rates 100% 90% 90% 80%
80%
83%
84%
Figure 5 Yansab feedstock cost compared to market price US$/mmbtu
Maintenance shutdown 80%
93%
2.5
80% 2
Title: Source: Please fill in the values above to have them entered in your report
70% 61% 60%
1.5
50% 1 40% 30%
0.5
20%
0
10%
NG Henry hub
Ethane
0% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 21015
Source: Company data, Al Rajhi Capital
Market
Yansab
Source: Bloomberg, Al Rajhi Capital
Discounted feedstock availability: Yansab receives feedstock at discounted prices from Saudi Aramco. Despite the sharp upward revision in energy prices, the company gets natural gas at ~40% discount to current market prices, while ethane is supplied at ~15% discount even during the current low commodity price scenario. Propane is supplied at a 20% discount to FOB Japan price (28% earlier). Thus, Yansab and other Saudi Petchem players continue to enjoy a competitive advantage over international peers, allowing them comparatively high profit margins. Based on our estimates, cost of raw materials constituted around 40% of the total cash costs for the company. By cash costs we mean the difference between Revenue and EBITDA for Yansab. We expect overall 7% y-o-y increase in COGS in 2016. By our estimate, gas/liquid feedstock mix is 46%/54% within the feedstock.
Disclosures Please refer to the important disclosures at the back of this report.
3
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Ability to increase pay-out Yansab is expected to turn into a net cash positive company in 2016, even assuming a dividend payout ratio of 100%. The company generates strong cash flow from operations and has minimum capex requirements currently. This makes it a very attractive stock for investors looking for stable dividends, not to mention our conservative estimates for 2016. Strong cash flow generation: Yansab generated SAR3.4bn cash flow from operations in 2015, which allowed it to reduce its net debt by ~65% y-o-y to SAR647mn, as it paid back debt to the tune of SAR1.46bn during the year. Cash flow from operations per share stood at SAR6.1 in 2015, down 15% y-o-y. The company’s net debt/EBITDA ratio stood at only 0.24x at the end of 2015. With its ability to generate strong cash flow, we believe the company is likely to turn net cash positive by 2016-end, even assuming a dividend payout ratio of 100%. Low capex requirements: SABIC is the parent company of Yansab and Yansab is a single project company. Therefore, we believe capacity additions will likely be spearheaded by the parent and not Yansab. Thus, capex requirements are expected to remain low in the foreseeable future. For 2015, the company’s capex witnessed a one-off jump to SAR793.8mn (from SAR118mn in 2014), which included spending on a housing project for employees. However, we expect this to normalize from 2016 onwards (SAR250mn-SAR200mn). Due to its strong cash flow generation and low capex commitments, we believe the company would not have difficulty in repaying its outstanding gross debt of ~SAR4bn, even in the current depressed scenario, while maintaining a strong dividend payout. Figure 6 Cash flow analysis 8.0 7.0
3.5
7.2 6.4
3.0
3.0 6.1
7.0 6.1
3.0
6.0 4.7
5.0
2.5 4.1
2.0
4.0
3.3
3.0
3.7 1.8
2.9
2.0
1.5
1.5
2.0 1.0
1.0
(0.3)
(0.2)
(1.4)
(0.4)
(0.4)
2013
2014
2015
2016E
2017E
-
0.5
(1.0) (2.0)
CFO/share
Capex/share
Free cash f low/share
DPS (RHS)
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
4
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Attractive valuations Yansab stock corrected 25% over the last two months, under pressure from the weakness in crude oil prices. We believe the sharp stock price fall provides a good opportunity for longterm investors to buy into a stock with stable operating performance and strong free cash flow. We have valued the company using different valuation methodologies – Relative Valuation (30% weight), Discounted Cash flow (40% weight), and Discounted Dividend (30% weight). Using a weighted average of the three valuation methods, we arrive at our target price of SAR38.8 on Yansab, which provides a potential upside of ~26% from the current market price. Hence, we raise our rating on Yansab to Overweight. PE Relative Valuation: On a PE basis, the stock is trading at a premium to its 3-year average as well as the sector’s 12-m forward PE ratio, indicating that the stock price has fallen less than earning expectations. This can primarily be attributed to its strong cash flow and high dividend paying ability. We believe a PE relative valuation is not a correct method to value companies in the current depressed commodity price scenario, as stock valuations also discount a commodity up-cycle, which can make them look expensive. Nevertheless, we have assigned a 30% weight to the PE valuation. We have used the industry’s 2016E average PE of 12x for Yansab, while the stock is currently trading at 20.7x our 2016 EPS estimate (the chart below uses Bloomberg consensus data). Figure 7 Historical 12m Forward PE movement 18 16 14 12 10 8 6 4 2 0 Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Petchem index
Jul-14 Yansab
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Yansab 3.yr avg
Source: Bloomberg, Al Rajhi Capital
DCF Valuation: We estimate Yansab’s earnings to be under pressure in 2016 due to increased energy prices and falling product prices. The impact is likely to be partially offset by falling prices of market-linked feedstock prices (naphtha, gasoline etc.) and managementdriven efficiency improvement initiatives. From 2017, we expect growth in earnings as product prices improve in line with recovery in crude oil prices. Using a WACC of ~12.5% and a long-term growth rate of 2%, we arrive at a target price of SAR54.6 for Yansab. We have given a weight of 40% to the DCF valuation method. DDM Valuation: Based on our dividend payment expectations over the next five years and assuming a long-term growth rate of 2%, along with a discount rate of ~12.5%, we arrive at a target price of SAR38.9 per share for Yansab. This provides a potential upside of 26% from the current market price. We have given a weight of 30% for the DDM valuation.
Disclosures Please refer to the important disclosures at the back of this report.
5
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Income Statement (SARmn) Revenue Cost of Goods Sold Gross Profit
12/14A
12/15A
12/16E
12/17E
9,511
6,911
6,668
6,709
12/18E 7,953
(6,424)
(5,154)
(5,448)
(5,248)
(5,500)
3,087
1,758
1,220
1,461
2,453
Government Charges S.G. & A. Costs Operating EBIT Cash Operating Costs EBITDA Depreciation and Amortisation Operating Profit Net financing income/(costs)
(244)
(218)
(215)
(214)
(234)
2,843
1,540
1,005
1,247
2,219
(5,381)
(4,251)
(4,396)
(4,288)
(4,648)
4,130
2,660
2,272
2,422
3,305
(1,287)
(1,120)
(1,267)
(1,174)
(1,087)
2,843
1,540
1,005
1,247
2,219
(213)
(156)
(103)
(86)
(68)
Forex and Related Gains
-
-
-
-
-
Provisions
-
-
-
-
-
Other Income
-
-
-
-
-
2,630
1,384
1,161
2,151
Other Expenses Net Profit Before Taxes Taxes Minority Interests
(152)
(176)
902 (68)
(81)
-
-
(118) -
-
-
2,478
1,207
834
1,080
2,032
(1,688)
(1,125)
(834)
(1,026)
(1,707)
-
-
-
-
-
12/14A
12/15A
12/16E
12/17E
12/18E
562.5
562.5
562.5
562.5
562.5
6.69
4.14
3.74
4.01
5.55
EPS (SAR)
4.405
2.146
1.483
1.920
3.613
DPS (SAR)
3.000
2.000
1.483
1.824
3.035
12/14A
12/15A
12/16E
12/17E
12/18E
1.7%
-27.3%
-3.5%
0.6%
18.5%
-4.3%
-43.1%
-30.6%
19.8%
67.9%
1.4%
-35.6%
-14.6%
6.6%
36.5%
Operating Profit Growth
-5.0%
-45.8%
-34.8%
24.2%
77.9%
Net Profit Growth
-6.3%
-51.3%
-30.9%
29.4%
88.2%
EPS Growth
-6.3%
-51.3%
-30.9%
29.4%
88.2%
Net profit available to shareholders Dividends Transfer to Capital Reserve
Adjusted Shares Out (mn) CFPS (SAR)
Growth Revenue Growth Gross Profit Growth EBITDA Growth
Margins
12/14A
12/15A
12/16E
12/17E
12/18E
Gross profit margin
32.5%
25.4%
18.3%
21.8%
30.8%
EBITDA margin
43.4%
38.5%
34.1%
36.1%
41.6%
Operating Margin
29.9%
22.3%
15.1%
18.6%
27.9%
Pretax profit margin
27.7%
20.0%
13.5%
17.3%
27.0%
Net profit margin
26.1%
17.5%
12.5%
16.1%
25.6%
Other Ratios
12/14A
12/15A
12/16E
12/17E
12/18E
ROCE
14.5%
8.6%
5.8%
7.3%
13.2%
ROIC
14.2%
7.7%
5.8%
7.6%
14.8%
ROE
16.2%
7.8%
5.4%
7.0%
13.1%
Effective Tax Rate
5.8%
12.7%
7.5%
7.0%
5.5%
Capex/Sales
1.2%
11.5%
3.5%
3.0%
2.0%
Dividend Payout Ratio
68.1%
93.2%
100.0%
95.0%
84.0%
Valuation Measures
12/14A
12/15A
12/16E
12/17E
12/18E
P/E (x)
7.5
15.4
22.3
17.2
9.1
P/CF (x)
4.9
8.0
8.8
8.2
6.0
P/B (x)
1.2
1.2
1.2
1.2
1.2
EV/Sales (x)
2.2
2.8
2.8
2.6
2.0
EV/EBITDA (x)
5.0
7.2
8.1
7.2
4.9
EV/EBIT (x)
7.2
12.5
18.4
13.9
7.3
EV/IC (x)
1.2
1.2
1.2
1.2
1.2
9.1%
6.1%
4.5%
5.5%
9.2%
Dividend Yield Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
6
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
Balance Sheet (SARmn)
12/14A
12/15A
12/16E
12/17E
12/18E
Cash and Cash Equivalents
3,655
3,413
3,697
4,263
4,874
Current Receivables
2,525
1,844
1,867
1,812
2,028
Inventories
1,316
826
867
855
954
0
245
245
245
245
7,496
6,328
6,676
7,175
8,102
14,590
14,357
13,323
12,350
11,422
-
-
-
-
-
Other current assets Total Current Assets Fixed Assets Investments Goodwill Other Intangible Assets
192
80
80
80
80
Total Other Assets
189
203
203
203
203
Total Non-current Assets
14,971
14,641
13,607
12,634
11,706
Total Assets
22,467
20,968
20,282
19,809
19,808
1,462
1,464
1,464
1,464
1,464
Accounts Payable
222
201
167
201
278
Accrued Expenses
829
951
800
738
835
Zakat Payable
-
-
-
-
-
Dividends Payable
-
-
-
-
-
Other Current Liabilities
-
248
248
248
248
Short Term Debt
Total Current Liabilities
2,514
2,864
2,679
2,651
2,825
Long-Term Debt
4,060
2,596
2,096
1,596
1,096
Other LT Payables
-
-
-
-
-
Provisions
341
156
156
156
156
4,401
2,752
2,252
1,752
1,252
-
-
-
-
-
5,625
5,625
5,625
5,625
5,625
Total Non-current Liabilities Minority interests Paid-up share capital Total Reserves
9,927
9,727
9,727
9,781
10,106
Total Shareholders' Equity
15,552
15,352
15,352
15,406
15,731
Total Equity
15,552
15,352
15,352
15,406
15,731
Total Liabilities & Shareholders' Equity
22,467
20,968
20,282
19,809
19,808
Ratios
12/14A
12/15A
Net Debt (SARmn) Net Debt/EBITDA (x) Net Debt to Equity EBITDA Interest Cover (x) BVPS (SAR)
Cashflow Statement (SARmn)
12/16E
12/17E
12/18E
1,867
647
(137)
(1,203)
(2,314)
0.45
0.24
(0.06)
(0.50)
(0.70)
12.0%
4.2%
-0.9%
-7.8%
-14.7%
19.4
17.0
22.1
28.1
48.5
27.65
27.29
27.29
27.39
27.97
12/14A
12/15A
12/16E
12/17E
12/18E
Net Income before Tax & Minority Interest
2,630
1,384
902
1,161
2,151
Depreciation & Amortisation
1,287
1,120
1,267
1,174
1,087
Decrease in Working Capital
118
887
(250)
39
49
89
(68)
(81)
4,084
3,480
Other Operating Cashflow Cashflow from Operations Capital Expenditure
1,852
(119)
(794)
New Investments
(49)
(1,770)
-
-
Others
(22)
(14)
-
-
(190)
(2,578)
Cashflow from investing activities Net Operating Cashflow Dividends paid to ordinary shareholders Proceeds from issue of shares
3,894 (1,962)
902 (1,404)
(233)
2,294
(233) 1,618 (834)
(201)
(118) 2,978 (159) (159)
2,092
2,819
(1,026)
(1,707)
-
-
(1,298)
(1,462)
Effects of Exchange Rates on Cash
-
-
-
-
Other Financing Cashflow
-
-
-
-
-
(3,260)
(2,866)
(1,334)
(1,526)
(2,207)
Increase in Loans
Cashflow from financing activities Total cash generated
(500)
(500) -
284
566
611
3,021
3,655
3,413
3,697
4,263
Implied cash at end of year
3,655
1,692
3,697
4,263
4,874
12/14A
12/15A
12/16E
12/17E
12/18E
1.2%
11.5%
3.5%
3.0%
2.0%
Capex/Sales Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
(1,964)
(500)
Cash at beginning of period
Ratios
634
-
(201)
(141)
7
Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
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Yanbu National Petrochemicals Petrochemicals – Industrial 2 February 2016
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