Saudi Arabia’s Eastern Province Cement (EPCCO) reported a surge in net profit for the first quarter (Q1) of 2019, beating analysts’ estimates and pushing the company’s shares higher on Wednesday.

The company reported a Q1 2019 net profit after zakat and tax of 46 million Saudi riyals ($12.27 million), compared to 17 million riyals in Q1 2018, a 170.59 percent increase, beating EFG Hermes’ estimates by 35 percent.

“Overall, the results were decent,” Sameer Kattiparambil, an analyst at EFG Hermes told Zawya by email, adding that there was no major surprise from the company’s cement price.

EPCCO’s revenue stood at 181 million riyals in Q1 2019, compared to 139 million riyals in Q1 2018, a 30.22 percent increase.

“We have a Neutral rating on EPCC, as we believe the Eastern region will see limited cement price increases,” Kattiparambil said, thus the company’s “earnings growth is limited vs. the sector average (2018 to 2023 expected earnings per share compound annual growth rate of 28 percent vs. the sector average of 43 percent).”

The company’s shares gained 1.89 percent on Wednesday to reach 26.9 riyals and have increased by 30.07 percent so far this year.

“Moreover, its valuation is not that attractive (2020 expected EV/EBITDA of 9.7x), especially given that it is based in a region that lacks catalysts for volume growth, unlike some other regions (West and Central regions),” he said.

The company’s board of directors accepted the resignation of Abdulmohsen Saad Al Rowaished from his position as chairman of the board, and appointed Mohammed Saad Al Faraj to replace him.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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