Two of Saudi Arabia’s largest cement producers, Yamama and Yanbu have reported some of their results for 2012. The overall pattern is one of profit growth, though Yamama’s profits slipped somewhat in 2012’s final quarter.
Yanbu Cement announced a net profit of US$192 million (SR720 million) for 2012, marking a significant increase of 36.1% on the 2011 figure. The company said that such a performance had been made possible as a result of improved sales and the opening of a fifth production line part way through the year. Perhaps because of this new capacity, the company also saw a 32.7% increase in 4Q12 sales, which climbed to US$54.1 million.
Yamamah Cement revealed that its full-year net profits increased by 11% to US$218 million, in spite of the fact that 4Q12 profits fell by 9% y/y to US$46.4 million. The company blamed the lower sale prices achieved during the fourth quarter before the decline was reached.
A recent report by the National Commercial Bank (NCB) said that demand for cement in Saudi Arabia remains strong, with ongoing projects set to sustain growth for several years to come. It forecasted growth in market demand with a rate of 8.2% predicted in 2013 as demand reaches 56 million t. Longer term NCB predictions expect continued demand growth of 6.3% until 2015.
It is worth noting that Yanbu is likely to benefit from any significant growth in demand, as it has three lines with a combined capacity of 1.3 million t currently sitting idle. Predictions that this growth in demand will be disproportionately stronger in the western region of Saudi Arabia, where Yanbu is located, could well yield another successful year to come.
Written, based on various sources, by Jack Davidson.