Saudi Cement Firms Profits Down

Net profits of listed cement firms dropped by 16% to SR3.75 billion ($1 billion) in the past nine months of the current year, compared to SR4.46 billion in the same period last year, according to a financial report.

Likewise, cement firms’ profits of Q3, 2016 fell by 11.4% to SR857 million compared to SR967 million in Q3, 2015. The Q3 profits were also down by 35% compared to Q2 profits, which stood at SR1.31 billion, Reuters quoted Al-Hayat daily as reporting.

The number of listed cement companies stood at 14 with their capital reaching SR18.4 billion. Their market capitalization reached SR52 billion, or 3.3% of the capital market value.

Yamamah Cement Company is the largest in terms of capital at SR2.02 billion, followed by Madinah Cement Company at SR1.89 billion, Northerly Border Cement Co. at SR1.8 billion, while Um Al-Qura Cement Company has the least capital of SR550 million, the report said.

The Southern Region Cement Co. was the biggest profit booster capturing 19.3% of the sector’s total profits in nine months at SR724 million, compared to SR739 million in the same period last year, or a drop of 2.03%. The company attributed the profit fall to decline in sales, low demand and increased expenses due to the addition of a third line project, the Tihamah factory, to the company’s assets.

The company’s Q3 profits reached SR173 million compared to SR202 million, or a drop of 14.4%, and 35% compared to Q2 profits, which stood at SR268 million, the report said.

Saudi Cement Co. was the second largest for sector profit growth where it posted SR715 million in nine months of the current year, or 19.1% of the sector’s total profits.

However, the company’s profits dropped by 6.4% compared to the reports of the same period last year, which stood at SR764 million. The company attributed the profit fall to sales decline and high costs of sales due to increased prices of energy.

Likewise, Q3 profits dropped by 3.85% to SR200 million, compared to SR208 million in Q3, 2015, the report said.

On the other hand, shares of Arabian Cement Company to the sector profit growth reached 12.4%, where it realized profits of SR466 million in the past nine months, compared to SR447 million in the same period last year, or an increase of 4.23%.