Saudi Cement net rises 13% on manufacturing boost

Increased production efficiency boosted profits, the company says.

RELATED ARTICLES: Yamamah Saudi Cement sees 17% net rise in 2010 | Saudi's time has come | Results are in

Saudi Cement Company, one of the Kingdom’s biggest manufacturers, said net profits last year rose 13% to SAR 659.5 million as enhanced production lines translated into higher takings against 2009.

The Dammam-based maker of standard Portland salt-resistant and oil-field cements said this after-tax gain compared to SAR 582.4 million the previous year. Gross profits increased by the same percentage – up to SAR 768.9 million from SAR 679.5 million - with earnings per share rising to SAR 4.31 from SAR 3.81.

“The main reasons for the increase in profit in comparison with 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 told investors through the Tadawul stock exchange website on Saturday.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

Last week the company announced it would pay a dividend of SAR 4 to shareholders – equivalent to 40% of the company’s paid-up capital.

Saudi Cement Company is one of the biggest producers of cement in the country and has enhanced its production capacity to stem the fall in revenues faced across the domestic industry due to an increasingly saturated market, despite the sharp rise in infrastructure projects.

The company has a competitive advantage, some say, in that it is the only manufacturer with access to the country’s rail system, which can cut the cost of transport. Operating profit rose 14% to SAR 681.4 million from SAR 597.6 million.

Saudi cement companies have mostly posted gains to net profits for the year, despite pressures on sales volumes and values. Yamamah Saudi Cement Company, the third-biggest supplier, said net profits rose 17%, as after-tax gains potentially hit SAR 657 million compared to SAR 562 million from the previous year. Fourth quarter results net profits rose 10% to SAR 160 million.

Al Jouf Cement Company, which listed last year, posted a net profit of SAR 14.75 million for 2010, against a SAR 31 million loss in 2009.
Tabuk Cement Company saw net profits rise 1.82% to SAR 123.3 million despite a fall of 6% in net profits for the fourth quarter against the same period last year, a blip attributed to lower sales and the effect of maintenance work on the company’s production lines.

Earlier this month it announced a cash dividend approved for the second half of the 2010 of SAR 0.45 per share.

Saudi Cement Company's shares closed up 5.8% yesterday to SAR 51.