Yanbu Cement third quarter net rises by 33%

Yanbu nine-month profits also rose, by 14%.

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Yanbu Cement Company said net profits for the third quarter were higher by a third against the same period last year, as high construction activity in Saudi Arabia continues to boost supplier balance sheets.

The cement and clinker company said after-tax income will be SAR 125m, up from SAR 94m the previous year, on the back of a 29.8% rise in gross profits, which reached SAR 135m, up from SAR 104m. This is, however, a 16.6% fall in net profit against the second quarter of 2011.

“The reason of decrease in net profit for the third quarter compared to the second quarter for the same year due to decline in sales through the Ramdan and Eid vacation, an audit financial statement will announce later,” the company has advised investors.

Net profits for the nine months of 2011 is SAR 376m, up 13% against the SAR 331m posted last year, a result the company puts down to “increase in sales quantity , sales increase due to increase in demand”.

Gross profit over this period is SAR 404m, up 14.45% against the same period last year, with operating profit rising 14% to SAR 382m compared to 335m.

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Yanbu Cement is benefiting from the high demand for the building material in the country following extensive government plans to build roads, airports, railway systems, economic cities and social infrastructure.

One of Saudi Arabia’s largest manufacturers, is aiming to increase its capacity to 7m tonnes with a fifth production line. In the last month however, it has reported delays in implementation of the new line due to oil and natural gas shortages to power the unit.

In April it also reported that three new lines with a combined capacity of 4,000 tonnes were stopped due to a lack of fuel.
Last year the company was only one of two listed companies to not post higher sales than the previous year.

Shares declined 0.44% to SAR 55.75 in Riyadh yesterday at the end of the week’s trading.