“Approaching end of Q4, we anticipate overall respectable results by the Saudi companies in the fourth quarter driven by the kingdom’s strong economic outlook. We expect petrochemical companies to report a robust y-o-y growth in top and bottom line, though lower than previous quarters due to declining product prices. Further decline in product prices during the last few weeks might result in a weaker profits than our earlier estimates (at the beginning of Q4), especially for pure petrochemical companies such as Sipchem and Yansab. In the telecom sector, Hajj season should support all companies’ results, especially Mobily and Zain which were noticeably active with promotions during this season. Mobily is likely to report a significant revenue growth but decent profit due to declining margins. For STC, we expect decent results, better than last quarter’s. On the other hand, we expect Zain to achieve respectable operating results; however, high debt will weigh on its bottom line.”
Equity Strategy Research
