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Saudi cyclical earnings miss estimates

Petrochemical companies have so far posted better than expected results

Shares in Saudi Arabia may extend prior session losses on Thursday after major cyclical stocks reported earnings that fell short of expectations.

Shares of Saudi retail giant Fawaz Alhokair may be hit after its net profit for the first three months of the year missed analysts estimates by a large margin.

The retailer reported a net profit of 3.2 million riyals ($853,561), a 98.4 percent slump in net profit compared with the same period a year ago – its financial year starts in April 1. Sales fell by 3.2 percent, with the Saudi market being the main drag, the company said in a bourse statement.

Three analysts polled by Reuters had on average forecast Alhokair would make a quarterly profit of 160.16 million riyals. Shares in Alhokair are up 4.0 percent since a week ago.

Another cyclical stock, Al Tayyar Travel Group posted a 32.2 percent fall in first-quarter net profit on Wednesday, as reduced government spending hit the domestic tourism sector.

The company made a net profit of 194 million riyals ($51.8 million), but analysts at Saudi-based Aljazira Capital expected the company to make a quarterly profit of 210.8 million riyals.

Shares in Al Tayyar are up 0.8 percent since last Thursday.

Petrochemical companies have so far posted better than expected results, but the latest oil-linked producer to report earnings, Rabigh Refining and Petrochemical Co. fell behind as it swung to a first-quarter net loss.

The firm, a joint venture between Saudi Aramco and Japan’s Sumitomo Chemical, made a loss of 32.7 million riyals ($8.7 million). The company said in a bourse statement on Wednesday that its earnings were impacted by the plant’s gradual restart after a period of maintenance at the end of last year.