Rabigh (PETROR AB) Buy: Right place, right time

Research evidence excerpt

Rabigh (PETROR AB) Buy: Right place, right time

at an operational turnaround and financial

18.00

restructuring will help bridge the gap between Rabigh and its peers (see Rabigh:

Transformation and value transfer; 13 October 2025). The improvement in operations 11.60

and lower financial costs are evidenced in the turnaround into profitability in Jan/Feb. 5.20

05/25 11/25 05/26

Influx of cash strengthens capital position: The dislocation has created a near- Target price: 16.00 High: 14.85 Low: 6.46 Current: 14.16

term cash influx – FCF of SAR1.2bn in Q1 with net debt down by SAR0.9bn q-o-q – Source: LSEG IBES, HSBC estimates

most of that in March. While these numbers should not be annualised, every month

that the Strait of Hormuz remains closed improves the cash position at Rabigh by Sriharsha Pappu*

Global Head of Energy & Materials

over SAR0.7 per share. This cash helps Rabigh’s capacity to fund its Bottom of the HSBC Bank plc

Barrel (BoTB) fuel oil upgrade project – which would convert 89kbpd of loss-making sriharsha.pappu@hsbc.com

+44 20 7991 9243

fuel oil into c75kbpd of highly profitable diesel – which we see as critical to finding a

Ildar Khaziev*, CFA

long-term solution to fuel oil losses. For more details on BoTB and the impact of fuel Senior EM Oil & Gas and Utilities Analyst

oil losses, see our note from October linked earlier. HSBC Bank plc

ildar.khaziev@hsbc.com

What’s next: The operating environment remains volatile and we expect moderation +44 20 7992 3302

in refining spreads after a strong April. Cash generation and further net-debt Sameer Jahagirdar*

Associate

reductions in Q2’26 will be key areas of focus. Bangalore

Reiterate Buy, raise TP to SAR16 (vs SAR13 previously): We reiterate our Buy