Saudi Arabian Fertilisers Company (SAFCO) announced that its BoD has proposed a cash dividend of SAR1.5/share for 1H16, signaling a considerable cut from the company's last DPS of SAR3/share in 2H16. While we were expecting a cut in dividends due to i) weak nitrogen fertilisers market conditions; and ii) a limited retained earnings level, the DPS came even below our estimate of SAR2/share in 1H16 (we expected full-year DPS to come in at SAR3.5/share). This cut in dividend highlights the weak market trends that the company is currently operating in due to urea prices falling and holding steady near the USD200/tonne levels. Incorporating SAFCO's DPS cut for 1H16, the company now offers an annualised dividend yield of only 4.8% and implies a payout ratio of c95%. The ex-dividend date has been set at 27 June 2016. We continue to be sellers of SAFCO as the company trades at rich multiples, and as we think that other stocks in the sector (such as Advanced and Yansab) offer more attractive dividend returns. (Company disclosure, Ahmed Hazem Maher)   SAFCO: SAR62.44 as of 16 June 2016, Rating: Sell, FV: SAR57.50 per share, MCap: USD6,938 million, SAFCO AB / 2020.SE