Southern Province Cement 4Q15 results beats estimates

Southern Province Cement 4Q15 results beats estimates
20 January 2016

Saudi-based Southern Province Cement Co (SPCC) posted a strong set of results for 4Q15, with net profits at SAR298m (US$79.5m), coming in ahead of Al Rajhi Capital and consensus estimates of SAR263m and SAR257m, respectively.

The rises came on the back of increased sales volumes and lesser use of imported clinker, which in turn led to lower cost of goods sold, Al Rajhi Capital said.

The company’s top-line continued to grow at a healthy rate, driven by new expansion and stable cement prices in the company’s areas of operation, it added.

Going forward, margins are expected contract as a result of the government’s subsidy reforms. Nevertheless, SPCC is one of Al Rajhi Capital’s top picks in the cement sector. The research firm maintained its ‘Overweight’ rating, with a revised target price of SAR78.

Published under Cement News