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Yansab
Petrochemical Industries Sector
YANSAB AB - 2290.SE
14 January 2015
Yanbu National Petrochemical Co. (Yansab)
Recommendation
Fair Value (SAR)
Overweight
55.00
Price as of 13 January 2015
Expected Return
40.56
35.3%
Company Data
Tadawul Symbol
52 Week High (SAR)
52 Week Low (SAR)
YTD Change
3-Month Average Volume (Thousand Shares)
Market Cap. (SAR Million)
Market Cap. (USD Million)
Outstanding Shares (Million Shares)
2290.SE
77.75
38.50
-14.6%
968
22,866
6,098
562.5
Yansab
Tadawul Petrochemicals Index
Yanbu National Petrochemical Company (Yansab) released major KPIs for
FY14 reporting a 39.71% increase in its bottom line in Q4 2014 hitting SAR
617.8 million up from SAR 442.2 million in Q4 2013. The figure exceeded
Bloomberg’s consensus of SAR 584.4 million. Yansab attributed the significant
growth in net earnings to comparatively higher sales volumes taking into account the temporary shutdown of production facilities in Q4 2013. In comparison with Q3 2014, net income tumbled 10.63% on lower selling prices.
On an annual basis, FY14 bottom line shrank 6.31% reaching SAR 2,477.8 million versus SAR 2,644.6 million in 2013 driven by lower selling prices, higher
production cost and Zakat provisions.
Meanwhile, gross profit (GP) posted SAR 773.2 million in Q4 2014, falling
8.48% QoQ and increasing 31.14% YoY, while slumping 4.27% in FY14 to SAR
3,087 million. Elsewhere, operating profit (EBIT) in Q4 2014 mounted 33.09%
YoY and declined 9.2% QoQ ending the quarter at SAR 712.3 million. Over the
whole year, the figure shifted down 5.02% totaling SAR 2,842.8 million.
Latest Developments
Major Shareholders ( > 5% )
Saudi Basic Industries Corp. (SABIC)
General Organization for Social Insurance
FY14 Update
51.00%
11.92%
Tadawul Index
In January 2015, Eng. Mutlaq Al Morished, chairman and board member, resigned and was replaced by Mr. Yousof bin Abdullah Al Bonyan.
In December, the company`s board proposed a cash dividend of SAR 1.5 per
share for 2H 2014.
140
Our Comment
130
120
Absent the effect of the temporary shutdown in Q4 2013, the preliminary
results will obviously manifest negative impact from lower selling prices in the
fourth quarter.
110
100
90
80
70
60
50
For more information you may contact:
Turki Fadaak
Research & Advisory Manager
[email protected]
Or Albilad Capital Head Office:
Tel:
Fax:
P.O. Box:
Riyadh
+966 11 203 9892
+966 11 479 8453
140
11411
Our website:
www.albilad-capital.com/en/research
Prices of petrochemical products witnessed a remarkable downward trend in
Q4 2014 in parallel with record low oil prices in five years. Average ethylene
price dropped from USD 1,493/ton in Q3 2014 to USD 1,177/ton, while average propylene price tum-bled from USD1,361/ ton in Q3 2014 to USD 1,016/
ton in Q4 2014. Regarding other products, average price of polyethylene fell
from USD1,591 to USD 1,416/ton. In addition, polypropylene price averaged
USD 1,370/ton down from USD 1,533. Meanwhile, average methanol price
(China) culminated at USD 349/ton from USD 325/ton in Q3 2014. According
to Argaam Business Info., ethylene price currently stands at USD 800 versus
USD 670 for propylene. Meanwhile, prices of polyethylene and polypropylene
sustained their drop to USD 1,155 and USD1,070 per ton, respectively.
Lower prices for final products as well as feedstock are expected to squeeze
top line and margins of the company in addition to its competitive advantages in international markets, hence our fair value is trimmed to SAR 55
from SAR 74 per share.
FY - Ending December
2011
2012
2013
2014
EV/EBITDA (x)
EV/Sales
P/E
Dividend Yield
P/B
Price/sales
Revenues growth
6.82
3.27
7.20
0.0%
2.17
2.37
65.9%
7.82
3.27
9.42
0.0%
1.76
2.46
-3.7%
6.77
2.95
8.65
7.4%
1.52
2.44
0.6%
9.23
7.4%
-
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Yansab
Petrochemical Industries Sector
YANSAB AB - 2290.SE
14 January 2015
Income Statement (SAR mn)
2010
2011
2012
2013
2014*
Sales
COGS
SG&A
EBITDA
EBITDA Margin
Depreciation and amortization
EBIT
Net interest income
Investment Income
Others
Pre-Tax Income
Tax and Zakat
Net Income
5,821.5
2,817.1
123.1
2,881.4
%49.5
)834.9(
2,046.5
9,659.3
4,848.4
175.4
4,635.5
%48.0
)1,017.8(
3,617.7
9,299.0
5,171.6
233.6
3,893.7
%41.9
)1,018.4(
2,875.4
9,353.6
5,048.8
231.9
4,073.0
%43.5
)1,080.1(
2,992.9
2,842.8
)376.1(
0.0
42.7
1,713.1
40.3
1,672.8
)413.3(
0.0
62.3
3,266.6
92.3
3,174.3
)360.7(
0.0
31.3
2,546.0
117.6
2,428.4
)259.9(
0.0
29.1
2,762.2
117.6
2,644.7
2,477.8
Balance Sheet (SAR mn)
2010
2011
2012
2013
2014*
Cash and marketable securities
Accounts Receivables
Inventory
Others
Total ST Assets
789.7
2,079.8
901.1
656.3
4,426.8
599.1
2,582.7
1,170.0
768.8
5,120.6
529.8
2,561.8
1,111.6
1,149.6
5,352.8
2,106.2
2,379.8
1,119.1
1,176.8
6,781.9
-
Net Fixed Assets & Projects Under Implementation
Intangible Assets
Others
Total LT Assets
Total Assets
18,425.7
274.3
36.7
18,736.6
23,163.5
17,588.0
234.1
32.4
17,854.5
22,975.1
16,497.8
330.1
207.9
17,035.7
22,388.5
15,623.4
304.9
190.6
16,118.8
22,900.8
-
Short term debt and CPLTD
Accounts Payable
Others
Total ST Liabilities
1,782.7
2,814.5
1,278.9
1,298.4
-
256.3
222.3
2,261.3
423.4
317.6
3,555.5
361.4
831.1
2,471.4
252.1
623.5
2,174.0
-
Total Long Term Debt
Other non-current liabilities
Equity
Total Liabilities and Equity
10,910.7
2,651.0
7,340.5
23,163.5
6,542.5
2,362.4
10,514.8
22,975.1
6,821.0
134.9
12,961.2
22,388.5
5,522.6
160.8
15,043.3
22,900.8
-
Cash Flow Statement (SAR mn)
2010
2011
2012
2013
2014*
Operating Cash Flow
Financing Cash Flow
Investing Cash Flow
Change in Cash
Ending Cash
1,697.0
3,295.6
3,345.4
3,620.7
-
)200.7(
)3,238.0(
)3,072.8(
)1,839.8(
-
)1,312.2(
)248.2(
)341.9(
)204.5(
-
184.1
)190.6(
)69.3(
1,576.4
-
789.7
599.1
529.8
2,106.1
-
* Figures released by the company
Presentation of financial statements may differ from the company’s presentation. However, there is no impact on the final results.
2
Yansab
Petrochemical Industries Sector
YANSAB AB - 2290.SE
14 January 2015
Albilad Capital Rating Methodology
Al-Bilad Capital uses its own evaluation structure, and its recommendations are based on quantitative and qualitative data collected by the analysts.
Moreover, the evaluation system places covered shares under one of the next recommendation areas based on the closing price of the market, the fair
value that we set and the possibility of ascent/descent.
Overweight:
The Fair Value exceeds the current share price by ≥ 10%. We expect the share price to reach the Fair Value over the next 9-12
months
Neutral:
The Fair Value is either more or less than the current share price by < 10% We expect the share price to reach the Fair Value over
the next 9-12 months
Underweight:
The Fair Value is less than the current share price by ≥ 10%. We expect the share price to reach the Fair Value over the next 9-12
months
To be Revised: No Fair Value had been set for one or more of the following reasons: waiting for more analysis, waiting for detailed financials ,
waiting for more data to be updated, major change in company`s performance, change in market conditions or any other reason
from Albilad Capital Research.
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