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Saudi Cement Company reports 39% increase in Q3 profits

World Cement,

Increasing its operating profit by 43% from last year’s SAR143 million (US$38.12 million) to SAR204 million (US$54.39 million), Saudi Arabia’s biggest supplier by capacity said it made SAR195.3 million (US$52.07 million) after tax, up 39% from SAR140.3 million (US$37.4 million) last year.

The country is currently undertaking high levels of construction in its major cities and airports, driving demand. Reflecting this, net profit for the first three quarters of the year rose by 22.1% to SAR619.9 million (US$45.3 million).

“The reasons for the increase of the profits for the third quarter and nine months in comparison with corresponding periods of previous year are increased production efficiency from relying on new production lines that have achieved more stable operating efficiency, and growth in local demand,” the company recently told investors.

However, net profit was down 8.6% from the SAR213.7 million (US$56.97 million) posted in the second quarter, a result the company attributed to the slowdown in sales during the summer months, particularly during Ramadan and Eid al-Fitr. Yanbu Cement, Qassim Cement and Yamamah Saudi Cement have echoed this sentiment in their respective third quarter results.

New economic cities, five new airports and renovations of existing structures, thousands of houses and a national rail system are just a few of the large scale construction projects currently underway in Saudi Arabia, which has remained peaceful and stable compared to the tumult in North Africa and elsewhere.

The scale of the projects has attracted international contractors and consultants and has boosted local material suppliers.

The cement index – an aggregate of share prices of the country’s publicly traded cement companies on Riyadh Tadawul stock exchange – is up by more than 19% on the start of the year as higher sales has driven up the companies’ share prices.

Hail Cement, a newly listed company, is expected to begin trading its stock soon. Saudi Cement saw it earnings per share for the nine months rise to SAR4.05 from SAR3.32 for the corresponding period last year. The company’s share price recently rose by 0.79% to SAR63.2.

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