business-data | Edakulathur Michael Johnson

Arabian Cement Company (ACC) has had sales, gross profit, operating profit and net profit during 2005 of SR687.2mn (up 18.7% yoy), SR348.6mn (up 32.2% yoy), SR313.3mn (up 40.6% yoy) and SR330.9mn (up 8.0% yoy) respectively. The average realization per tonne of cement sold increased by 10.0% to SR225.7 during the year from SR205.2 in the previous year. The weighted average share value of ACC is now SR176, as against SR118 (post stock-split; SR589 pre-split) arrived at in our September 2005 Report. At the current market price of SR110 on the Tadawul, the ACC share is quoting at a discount of 59.8% to its intrinsic value. We, therefore, recommend a ‘Buy’ on the ACC stock at the current price levels, upgrading it from our earlier recommendation of ‘Hold’. The stock has lost SR129 (over 54%) on the Tadawul since the middle of February 2006 when it had touched a high of SR239, to close at SR110 on April 17, 2006. The upgrade in our recommendation on the stock, therefore, reflects both a change in the intrinsic valuation of the company as well as the massive run-down on the stock on the Tadawul in recent weeks. In order to view the full report, kindly click on the link below: http://www.globalinv.net/research/ArabianCement-Results-042006.pdf