Saudi Ceramic Q1 2021 net profit above estimates: Al Rajhi Cap

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Saudi Ceramic Co.’s net profit of SAR 71 million in the first quarter of 2021 came above Al Rajhi Capital’s estimates of SAR 47 million, the brokerage firm said in an earnings review.

Al Rajhi Capital remains bullish on Saudi Ceramic as strong demand arises from mortgage projects, projects backed by the Public Investment Fund (PIF), and other gigaprojects.

The steps taken by the company to reduce its leverage are also likely to lower its finance cost, aiding further improvement in profitability and dividend.

Further, the government’s encouragement of domestic players, through its stress on local content, will provide Saudi Ceramic an edge over imports.

Al Rajhi Capital expects Saudi Ceramic to achieve a net profit of SAR 259 million in 2021 and SAR 322 million in 2022.

The brokerage maintained its ‘Overweight’ rating for the company while increasing the share target price (TP) to SAR 56 from SAR 47.