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شركة عمان كلورين
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Investment Opinion
Oman Chlorine reported a 32% YoY decline in its hydrochloric acid sales by volume in Q3 2009 at 6,111 MT as demand from oil & gas industry continues to remain low. Hydrochloric acid is used in stimulation of oil wells and hence this segment sales is directly related to the level of oil well drilling activity in Oman and the neighbouring UAE, which are its main markets. Sales by volume of its other major product, caustic soda also fell 40% YoY despite relatively stable demand as lower demand for acid led to lower production volume of associated products in its integrated chlor-alkali plant. Despite the sharp drop in volumes, total sales in 9M 2009 declined only 16% as average realized price for its products was higher by 20% YoY. The differential in average realized price has declined from 26% in H1 2009 to 20% in 9M 2009 compared to the corresponding periods of the previous year. We expect the price differential to narrow further in Q4 2009.
Going forward, we expect both average realized price and volume to be higher in 2010 as demand for chemicals improves. The start of operations of its 51% joint venture chlor-alkali plant in Qatar in Q2 2011 is expected to increase its production volumes substantially. We were told by the management that the company’s entry into the Qatar market would be a key growth driver in the medium-term. Qatar’s vast oil & gas drilling industry would provides strong opportunities.
We recommend a HOLD on the stock with a target of RO 0.417, 11% higher that its last closing price of RO 0.374.
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| اسيا |
أوربا |
أمريكا |
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جميع البيانات عند إقفال السوق |
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