‎AlJazira Cap says Sipchem Q23 2021 profit beats estimates, maintains ‘Neutral’ rating

‎AlJazira Cap says Sipchem Q23 2021 profit beats estimates, maintains ‘Neutral’ rating

Logo of Sahara International Petrochemical Co.’s (Sipchem)

Sahara International Petrochemical Co.’s (Sipchem) Q3 2021 net profit of SAR 1.03 billion beat AlJazira Capital and market estimates of SAR 792.3 million and SAR 840.2 million, respectively.

“The short-term outlook on Sipchem’s key product prices is largely driven by a combination of very high energy prices, tight global supply, where logistics issues continue to keep petrochemical prices high in the short run,” the research firm said.

AlJazira Capital’s expectations remain positive on the company’s growth prospects, taking into consideration its operational efficiency in light of market improvement and solid cash flow.

In addition, it raised its forecast for average methanol prices for 2022 to $368 from $310 per ton, amid high energy prices and low supply.

Product fundamentals and market sentiment are projected to continue until the end of the first quarter of 2022, it added.

Sipchem's sales volume is expected to maintain its level during the fourth quarter of 2021, on the recovery of global economic activity.

The Saudi listed firm is likely to boost its opportunities and future investments under the "Shareek" program, the reported noted.

Sipchem is expected to report a net profit of SAR 3.4 billion in 2021 and SAR 2.77 billion in 2022.

AlJazira Capital maintained its “Neutral”