Southern Province net profit up by half for Q3

Southern Province has seen net gains from successive quarters in 2011.

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Southern Province Cement has seen net profits for the third quarter rise by more than half that of last year, the strongest gains reported so far among cement suppliers in Saudi Arabia.

The cement and clinker company said it made SAR 180m after costs and tax, up 51.26% against last year’s third quarter, as operating profit surged 49% to SAR 185m from SAR 124m. This was down 24% against the second quarter of 2011, however, due to slower in sales during Ramadan.

Nine months profit for 2011 have risen 30.5% against last year – from SAR 494m to SAR 645m – with earnings per share, a key indicator of greater company worth, rising to SAR 4.61 against SAR 3.52 for the same period of the previous year.

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“The reason for the rise in net profit in the third quarter and the nine months period over the same period last year was due to the increase in the local sales because of the high demand in the local market of the company,” the Abha-based company told investors.

Southern Province Cement is one of the biggest suppliers of the building material in the Kingdom in a competitive market, with a market capitalisation of around SAR 9.6bn with no debts.

Analysts have been cautious on the stock, with the team at TAIB Securities in Bahrain and Farouk Miah at NCB Capital both giving a ‘neutral’ rating.

Southern Province shares rose 1.73% to SAR 73.5.