Al-Mojil Plunges on 2011 Loss Forecast: Riyadh Mover
(Corrects to show Global has hold recommendation in last paragraph of story first published yesterday.)
Mohammad Al-Mojil Group Co. (MMG), a Saudi Arabian construction services provider, had its biggest two-day drop since 2008 on investor speculation the company’s fourth- quarter loss may widen.
Al-Mojil said Jan. 18 it expects “substantial losses” that exceed 10 percent of its total assets. The shares fell 6.5 percent to 20.1 riyals at the 3:30 p.m. close in Riyadh, bringing its drop since Jan. 21 to 16 percent, the biggest two- day decline since November 2008. Al-Mojil had the biggest percentage drop on Saudi Arabia’s Tadawul All Share Index (SASEIDX), which slipped 0.2 percent.
If the company projection materializes, “we expect the full-year loss to be higher than that of 2010 at 261 million riyals,” said Hettish Karmani, a Kuwait-based analyst at Global Investment House KSCC. (GLOBAL)
Al-Mojil posted a 179 million-riyal ($48 million) loss in 2010 after a profit of 40 million riyals the year earlier, according to data compiled by Bloomberg.
The 2011 loss is “due to additional costs of materials, equipment and manpower of some of the ongoing projects in excess of the approved budgets,” the Dammam, Saudi Arabia-based company said after the close of trading on Jan. 18.
Al-Mojil said it hired a consultant to review unprofitable projects. The company will also delay publishing its quarterly results, which were scheduled for this week, according to Bloomberg data.
Al-Mojil, Saudi Arabia’s second-biggest company on the Tadawul All Share Building & Construction Index by market value, has dropped 17 percent so far this year after a 29 percent surge in 2011. One analyst recommends investors buy Al-Mojil, while three, including Karmani, have a “hold” rating, according to data compiled by Bloomberg.
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