Qassim Cement third quarter net profit rises 7%

Qassim Cement has also seen higher sales over nine months.

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Qassim Cement Company said it expects to post a rise of more than 7% in net profits for the third quarter compared to the same period last on the back of a boost to demand and production levels.

The Saudi cement and clinker company is forecast to make SAR 114.97m after tax, up from SAR 107.1m last year, it said in a notification to investors. This is on the back of a 9.83% rise in gross profits and an 11% rise in operating profit, up to SAR 126m and SAR 118m respectively.

“The reason for the rise in net profit over the same period last year and the comparison of this year third quarter against the previous year third quarter is due to increase in sales value and improved operating performance of the subsidiary company,” the Qassim-based company said.

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But this figure is more than a fifth down from the net profit reached in the second quarter of this year – which was SAR 144.65m. “The main reason for the decline in net profit of the third quarter compared to the previous second quarter is due to decrease in sales as a result of the occurrence of the holy month of Ramadan and Eid Al-fitr during the third quarter,” the company added.

A sales dip during August was also experienced by Yanbu Cement and Yamamah Saudi Cement, according to estimated figures and subsequent comment from the producers, also listed on Riyadh’s Tadawul stock exchange.

Meanwhile, net profit for the first nine months of 2011 is expected to reach SAR 388m, 4.8% higher than the same period last year following a 5.2% rise in operating profit.

Saudi Arabian cement companies are currently benefiting for strong demand for building materials as new projects across all sectors emerge on the back of higher government spending.

New economic cities, urban towers, thousands of new housing units and upgrades to airports and ports are just a few of the developments that have made the kingdom the current heart of construction in the Gulf.

The cement index on the Tadawul – an aggregate of cement company share performances – is up more than 19% since the start of the year.

Contractors and suppliers as diverse as Manitowoc, MAN Trucks and Drake & Scull International have highlighted the country as being at the centre of their focus.

Meanwhile, Yanbu Cement has confirmed that it has posted net profits of SAR 124.8m for the third quarter, up 32.51% against the same period last year, after providing a preliminary estimate of earnings earlier this week.