        Net income: SAR7mn, -43% Y-o-Y, vs. net loss of SAR46mn in 3Q18, and EFG net loss estimate of SAR12mn
        Revenues: SAR160mn, -5% Y-o-Y, +49% Q-o-Q, +26% vs. EFGe
        Gross profit: SAR33mn, -38% Y-o-Y, vs. gross loss of SAR25mn, and EFG gross loss estimate of SAR12mn 
 
Yamama Cement Company reported its 4Q18 financial highlights, with earnings in the black post two consecutive quarters of losses and coming in at SAR7mn (vs. net profit of SAR43mn in 4Q18 and net loss of SAR46mn in 3Q18), and beating our net loss estimate of SAR12mn. The beat was mainly due to higher-than-expected reported revenue, which came in at SAR160mn (-5% Y-o-Y, +49% Q-o-Q), and beat our estimates by 26% on the back of a substantial recovery in cement prices to SAR155/tonne (-21% Y-o-Y, +60% Q-o-Q, +20% vs. EFGe). However, sales volumes came in a tad lower than our estimate, at 1.04mn tonnes (+20% Y-o-Y, -7% Q-o-Q, -2% vs. EFGe). Cash cost per tonne remained stable during the quarter at SAR74/tonne (-4% Y-o-Y, flat Q-o-Q, -1% vs. EFGe), which, along with the cement price recovery, helped EBITDA margin recovery to 41.1% (-12pp Y-o-Y, +31pp Q-o-Q, +15pp vs. EFGe).
 
Our view: Overall, a good set of numbers. Although we were expecting cement price recovery from its beaten down levels of 3Q18, the pace of recovery was slightly surprising. It seems that the cement producers have started to focus on pricing, instead of market shares. Having said that, we still believe the high clinker inventory in the market and weak demand would bring in volatility in the cement prices over the short term (please note that we are assuming average cement price to increase to SAR150/tonne in FY19 from 2018 average of SAR135/tonne). We currently have a Neutral rating on Yamama Cement as the valuation seems unenticing (2020e EV/EBITDA of 11.6x, dividend yield of 2.7%). (Company disclosure, Sameer Kattiparambil, Dina Hicham)
 
Yamama Cement: SAR14.88 as of 13 Feb. 2019, Rating: Neutral, TP: SAR15.00/share, MCap: USD804mn, YACCO AB/3020.SE