Saudi Petrochemicals - NCBC

FINANCIAL PERFORMANCEHIGHER MINORITY INTEREST AND ZAKAT RELATED EXPENSESTasnee reported an increase in zakat expense for its subsidiaries and minorityinterest related expenses in 2009. In 2009, zakat related expenses stood atSR91.9mn (compared to an income of SR55.6mn in 2008) and minority relatedexpenses were SR452.7mn (compared to SR157.8mn in 2008). These higher thanexpected expenses were the primary reason behind the net income weakness forthe full year 2009. For the full year 2009, net income stood at SR526mn (SR601mnin 2008) lower than our original expectation of SR653mn. We have incorporatedthese increases while projecting Tasnee’s earnings in coming years.The table below displays revised estimates for Tasnee’s 2010 and 2011performance.Exhibit 60: Earnings revisionsIn SR mn, unless otherwise statedOld2010ENew2010E % chgOld2011ENew2011E % chgRevenue 14,251 17,123 20 15,224 17,506 15EBITDA 3,291 4,963 51 3,705 4,764 29Net profit 1,215 1,530 26 1,377 1,418 3Target price (SR) N/A N/A N/A 33.2 40.0 20Source: NCBC Research estimates27 April 2010 TASNEE – COMPANY UPDATE69