Arabian Cement half-year net profits rise 40%

Arabian Cement has seen an increase to its production efficiency.

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Arabian Cement Company said net profits for the second quarter and half-year rose 37.5% and almost 40%, respectively, as increased production helped it capitalise on the demand for the material despite losses for a subsidiary.

The company said post-tax profits reached SAR111.7m ($30m) over the last three months, far ahead of the SAR81.2m 9 ($21.6m)posted in last year’s second quarter, though this is down slightly against this year’s first quarter. Gross profit rose 46% to SAR139.3m ($37.1m), with operating profit rising by a similar percentage.

Net profit for the first six month of the year reached SAR227.8m 9$60.7m), up 39.8% against the SAR162.9m ($43.4m) last year.

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“The increase in profits this quarter, and half of 2011 compared to the corresponding quarter and half of last year, [is due] to increase production and sales in the Rabigh plant,” the company stated to investors yesterday. It added, however, that its subsidiary in Jordan – Qatraneh Cement Company – made a loss of JOD3m ($4.23m) due to the higher sales costs pushed up by high fuel prices and domestic competition along with lower production.

The Jeddah-based company produces all types of cement and its by-products. It has four other subsidiary companies along with Qatraneh, including Bahrain Cement Company, International City for Ready Mix Company, Al Batoon for Bricks and Tiling Manufacturing Company, Cement Products Manufacturing Company.

Earlier this month the company said it was undertaking a feasibility study to increase its production at Rabigh following the successful increase in efficiency and strong market demand.

The company is the latest cement firm in Saudi Arabia to see strong sales figures on the back of the high levels of construction activity in the country.

New economic cities, hospital and university projects, five new airports and the renovation of existing hubs, and numerous infrastructure projects are just some of the initiatives spearheaded by the government in an attempt to modernise the country and diversify its economy. At the same time, major cities such as Jeddah and Riyadh, the capital, are seeing high investment from private real estate developers building towers and villa developments.

Arabian Cement shares fell 0.853% to SAR46.5 yesterday.