Yansab Beats Analyst Forecasts With SAR964M 2Q Profit

Tuesday, Jul 12, 2011

(This story was originally published Monday.)

DUBAI (Zawya Dow Jones)--Yanbu National Petrochemical Co. (2290.SA), or Yansab, said Monday its second-quarter net profit nearly doubled to 964 million Saudi riyals ($257 million) from SAR502.4 million in the same period last year, beating analyst expectations, as output and sales increased.

The affiliate of the kingdom's petrochemical giant Saudi Basic Industries Corp. (2010.SA), or Sabic, attributed the strong increase to higher production and sales volumes coupled with stronger prices in most of its products.

NCB Capital said that Yansab's operating rate had probably been much higher than expected. "We believe Yansab's average operating rate was 95% in 2Q11, higher than our assumption of 85%," it said in a note.

Yansab shares were trading up 5.1% at SAR51.50 late Monday morning, and NCB Capital said it believed the stock "will perform well on the back of these results."

Yansab's profit was also 34% more than the SAR718 million it recorded in the first quarter of this year, it said in a statement posted on the website of the Saudi bourse.

The company said its earnings per share for the first half of 2011 were SAR2.99, compared with SAR1.35 for the same period last year.

An average consensus of five analysts forecast Yansab's net profit in the second quarter would be SAR734 million. Al Rajhi Capital predicted SAR759 million; Bahrain-based Securities and Investment Corp., or SICO, and Cairo-based EFG Hermes both pencilled in SAR674 million; Riyadh-based NCB Capital forecast SAR765 million; and Credit Suisse foresaw SAR799 million.

The ethylene producer was the second Sabic affiliate to report this quarter and its strong performance gave a minor fillip to petrochemical stocks on the market's Tadawul all-share index.

On Sunday, Saudi Arabia Fertilizers Co., or Safco, had reported weaker-than-expected profits.

-By Angus McDowall of Dow Jones; +971-4-446-1685, angus.mcdowall@dowjones.com

(END) Dow Jones Newswires

12-07-11 0421GMT