Tabuk Cement Company (TCC) [3090.SE] signed another memorandum of understanding (MoU) with International Tataloat Company to export 600k tonnes of clinker and 150k tonnes of cement to Yemen. The MoU will be valid for one year, effective 2 January 2019, and the financial impact will be reflected in 1H19. TCC had previously signed a MoU in Nov 2018 with the same company to export 6k tonnes of cement to Yemen. We believe this agreement would affect the company positively, especially that the export quantity represents c24% of the company’s clinker capacity. Hence, this would reduce the elevated clinker inventory, which now stands at 1.8mn, implying c22 months of clinker requirement. In addition, the company’s proximity to Duba port makes it feasible to export to Yemen, as per the company’s Chairman
 
Tabuk Cement: SAR11.04 as of 2 Jan. 2019, Rating: Neutral, TP: SAR12.50/share, MCap: USD265mn, TACCO AB/3090.SE
Sameer Kattiparambil