EPS figures calculated from Net Profit / 1,750,000,000 shares outstanding.
ARKAN share price as of 21 Jul 2008 close was 6.49 dhs, so 2008 estimated PE is about 6.49 / 0.24 = 27.0, based on Q2 earnings, which is higher than the market average PE of about 17, but not as bad as the triple figure PE seen for Q1 earnings. 2008 PE estimate based on H1 earnings is 6.49 / 0.15 = 44.3, which makes shares look more expensive - with the effect of lower earnings in 08 Q1. If Arkan keep up this sort of profit growth, their shares at AED 6.49 might even look reasonably priced in a year or two. However, the rate at which costs are increasing might be a problem (see the summaries for how little Revenue growth actually ended up on the bottom line) ....
Board of Directors / management report is included, which puts Arkan ahead of many, if not most, other UAE companies. There's not much to it though, just a restatement of figures in the account, and this paragraph at the end ...
Arkan 20 July 2008:
Operational Highlights:
The Cement and the Blocks Factories performed will during the year helped by strong demand and firm prices. The company has signed memorandums of understanding to set up factories with joint venture partners. The trading activity started during the second quarter of the year showed good revenues and profits.
The company is optimistic of continuing the good performance for the remainder of the year.
On behalf of the Board of Directors:
Salem Bin Mohammad Al Dhaheri
Chairman of the Board
July 20th, 2008
It's worth noting that there is no speicla growth in their existing businesses i.e. cement and blocks. The growth is because a new business segment has been added to the company's accounts, which is Steel. There was no press release about it so this was not publicly available information. The ascent in share price was a consequence of the fact that some people knew about this before any of us, something SCA needs to investigate.
If you want to get an idea about the extent of the impact of the new segment, dig this:
Cement revenue: AED 173m in HY08
Blocks revenue: AED 27m in HY08
And now the new segment out of nowhere
Steel: AED 294m.
How interesting. Thanks DQ. I wonder if that was around the time Arkan issued one of their denials of having any information that might affect their share price?
I think I'm glad I'm not an investor in Arkan shares. But this could be a good story for the new Middle East Investor Relations group to get their teeth into. They might be able to help ESCA with their investigation.
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