Saudi Cement profit rises 39% to $52.07m in Q3

Saudi Cement is gaining from higher construction demand.

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Saudi Cement Company said net profits for the third quarter rose by more than a third against the same period last year after stronger demand from the construction market and improved efficiency, though results were down against the second quarter.

Saudi Arabia’s biggest supplier by capacity said it made SAR 195.3m ($52.07m) after tax, up 39% from SAR 140.3m ($37.4m) last year. Operating profit rose 43% to SAR 204m ($54.39m) against last year’s SAR 143m ($38.12m).

Net profit for the first three quarters of the year rose by 22.1% to SAR 619.9m ($45.3m), reflecting the high demand overall for the material in the country, which is undertaking high levels of construction in its major cities and airports.

“The reasons for the increase of the profits for the third quarter and nine months in comparison with corresponding periods of 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.

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But net profit was down 8.6% from the SAR 213.7m ($56.97m) posted in the second quarter, a result the company attributed to the slowdown in sales during the summer months, particularly during Ramadan and Eid al-Fitr. Yanbu Cement, Qassim Cement and Yamamah Saudi Cement have also attested to this lull in their respective third quarter results.

New economic cities, five new airports and renovations of existing structures, thousands of houses and a national rail system are just a few of the large scale construction projects underway in Saudi, which has remained peaceful in 2011 compared to the tumult in North Africa and elsewhere.

The scale of the projects has magnetised international contractors and consultants and proved a boon for local material suppliers.

The cement index – an aggregate of share prices of the country’s publicly traded cement companies on Riyadh Tadawul stock exchange – is up by more than 19% on the start of the year as higher sales has driven up the companies’ share prices.

Hail Cement, a newly listed company, will begin trading its stock on Sunday.

Saudi Cement saw it earnings per share for the nine months rise to SAR 4.05 from SR 3.32 for the corresponding period last year. The company’s share price rose 0.79% to SAR 63.2 yesterday.