The overall outlook for Q4 2023 earnings remains mixed, although the petrochemical and construction sectors may face year-on-year (YoY) pressure, the Riyadh-based brokerage and investment bank Al Rajhi Capital said in a report.

"The petchem sector anticipates continued pressure due to weakened product prices and increased feedstock costs, with economic indicators signalling persisting demand sluggishness," the brokerage stated.

Similarly, the construction industry faces challenges with declining cement volumes and lower realisations, contributing to expected annual financial pressure.

In addition, telecom majors are likely to experience a decline in total net income due to lower average revenue per user and stagnant subscriber bases.

However, the retail sector expectations are optimistic, particularly for BinDawood Holding, projecting a substantial 44% YoY growth.

The food segment will show mixed outcomes, with Food Company and Savola Group benefiting from decreased raw material prices, while Saudia Dairy and Foodstuff Company (SADAFCO) faces challenges in topline and gross margins.

The energy sector anticipates varied growth, with drilling companies expecting sequential growth. In contrast, IT companies such as Al Moammar Information Systems Company (MIS) and Arabian Internet and Communication Services Company (solutions) expect declines in Q4 2023 revenues and net income.

Positive results are expected in the utility, transportation, media and financial services sectors, Alrajhi Capital said.    

(Editing by Brinda Darasha; brinda.darasha@lseg.com)