Revenue increased 7% YoY, in-line with our estimate
Sabic-Agri reported 3Q24 revenue of SAR 2,850mn (7% YoY and 6% QoQ). This result was in-line with U-Capital estimate and was above Bloomberg consensus of SAR 2,489mn.
Net income decreased 21% YoY in 3Q24, ahead of our estimate
Net Income for the quarter stood at SAR 827mn (-21% YoY and 17% QoQ). This figure compares with Bloomberg consensus of SAR 868mn and was ahead of U-Capital estimate. For 9M24, net income stood at SAR 2,373mn reflecting a 11% YoY decline.
Target Price Under Review
Sabic-Agri reported a YoY decline in net income due to higher costs of goods sold. For 4Q24e, the trade outlook indicates the global nitrogen supply is vulnerable to winter energy costs, feedstock adjustments, and unplanned maintenance. Demand is primarily driven by India’s year-end purchases, offering producers a chance to secure orders. Average sales prices in 3Q24 rose by 2% YoY and 11% QoQ, a trend expected to continue due to demand from India. Consequently, we have placed the stock price under review and will update our investment case shortly.