Revenue increased 13% YoY, came below our estimates
Tasnee reported revenue of SAR 863mn (+13% YoY and -22% QoQ), falling short of U-Capital estimates. The growth is primarily attributed to increased sales volume for most of the products partially offset by decrease in avg. selling prices of few products.
Net income jumped to SAR 896mn
For 1Q25, net income jumped to SAR 896mn against the loss of SAR 72mn in 1Q24 and net income of SAR 33mn in 4Q24.
Maintaining Hold rating
For 1Q25, the net profit was mainly driven by a one-time, non-cash gain (SAR 1,061mn) resulting from the debt restructuring of the Acrylic Complex, coupled with higher sales volumes across most product categories and a reduction in zakat charges. These positive factors outweighed the negative impact of lower average selling prices for certain products, a decline in the share of profit from joint ventures, increased share of losses from an associate (Tronox Holdings plc), and higher net finance costs. Looking ahead, we anticipate a recovery in the petrochemical sector, with steady increase in prices. Consequently, we maintain our Hold rating on the stock.