Saudi Ceramics Second Quarter Revenue Reached $ 95 Million; gross margin up 34%

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Saudi Ceramics, a leading provider of building solutions and ceramic products such as porcelain tiles and sanitary ware, said its revenue for the second quarter reached SR 356 million ($ 95 million dollars), down 7% from a year ago.
However, that figure was lower than the RS 418 million predicted by Al Rajhi Capital, one of the kingdom’s leading financial service providers.

Lower construction activity due to Ramadan and a higher base in Q2 2020 due to pre-VAT purchases affected revenue, Al Rajhi Capital said in its review.

However, the gross margin increased 33.7% year-on-year to SAR137mn due to a gross margin expansion of 1166 basis points (26.8% in Q2 2020 and 33.5% in Q1 2021).

The margin increase was driven by higher prices for tiles and water heaters and improved capacity utilization in the sanitary ware segment.

Al Rajhi Capital pointed out that operational efficiency, lower provisions and lower financial costs, through debt reduction, resulted in more than 9-fold increase in net profit to SR 63 million. It was better than his estimate of SR 60 million.

Regarding the future outlook for Saudi Ceramics, he said: “We remain optimistic on Saudi Ceramics as we expect demand to remain robust. . “

“We also expect financial costs to remain low, aided by the recent debt restructuring; this will boost both profitability and payout dividends,” the leading financial services group said.

“Overall, we expect ROCE to improve to around 13-16% for 2021 and 2022, compared to ROCE of 10% in 2015,” said Al Rajhi Capital.

“So, after the second quarter 2021 results, we are increasing our target price from SAR56 / sh to SAR69 / sh and maintaining our” overweight rating “, he added.-TradeArabia News Service

Copyright 2021 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).


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