Saudi Ceramics' Q2 revenue soars to $102mln, beats estimates

Al Rajhi said the margins got healthier owing to high operating leverage and was partially offset by higher provisions on receivables

  
A Saudi trader casts a shadow as he monitors stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

A Saudi trader casts a shadow as he monitors stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

REUTERS/Ahmed Yosri
Saudi Ceramics, a leading provider of building solutions including various types of ceramic products such as ceramic tiles, porcelain tiles and sanitaryware, said its revenue surged by nearly 40 per cent y-o-y to hit SR382 million ($102 million), beating analysts' expectations of SR303 million ($81 million) by 26%.
 
The beating of the estimate stems from the fact that tiles demand has remained unabated even during the current scenario of low economic activity mainly due to pre-vat buying and reduced supply of imported tiles, said the report released by Al Rajhi Capital, a leading financial services provider in the kingdom.
 
Company increased tiles prices during the quarter (there were three price increases this year for different varieties of tiles), it stated.
 
Gross margin at 26.8% saw increase both on y-o-y (+468bps) as well as q-o-q (+500bps) basis mainly due to better sales mix, it added.
 
About the operating front, Al Rajhi said the margins got healthier (+255bps q-o-q) owing to high operating leverage and was partially offset by
higher provisions on receivables.
 
On its future outlook, the expert said Saudi Ceramics continues to remain bullish given the strong demand from housing projects and tailwinds from the anti-dumping duty.
 
Moreover, all product segments of the company fall in the list of “local content” issued by Local content and Government Procurement Authority which further protects the company from the imported supply, stated Al Rajhi Capital in its statement.
 
Thus, post-Q2 2020 earnings we increase our target price from SR38 to SR43/sh and maintain our “overweight rating,” it added.-TradeArabia News Service

Copyright 2020 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Equities