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RELATED ARTICLES: Sharjah C&ID, Arkan, RAK Co a mixed bag for cement | Raysut Cement half-year profits fall 21% on 2009 | Oman Cement Co. gets OMR7.34m bail out
Eastern Province Cement and Southern Province Cement experienced very different second quarters as the two suppliers posted a 1% gain and a 13% fall in net profits compared to last year.
The two companies notified the Saudi stock exchange at the beginning of this week. Damman-based Eastern Province saw profits rise to SR104 million, whereas Southern Province, the biggest manufacturer in the Kingdom, saw net gains fall to SR185 million from SR212 million between April and June 2009.
Shares in Southern Province fell 4.4% on the news, closing at SR6.6.
Most materials suppliers in the GCC have overall experienced a difficult last year on the back of declining sales, smaller orders and increased production costs. So far the biggest losses have been among Oman and UAE-based cement firms, which have also been affected by the decline in projects.
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Saudi cement firms have increased their production capacity, with volumes growing 17% to 22.1 million tons in the first half of 2010 due to higher demand, according to the Ministry of Commerce and Industry, first cited by Al Eqtisadiah.
Qassim Cement Company, however, saw net income fall 8.3%, from SR148 million to SR135.8 million. The Buraydah-based company saw its shares fall 0.7% yesterday to close at SR70.
The team at TAIB Securities posted a neutral position on Southern Province on 30th June. Farouk Miah, an analyst at NCB Capital in Riyadh, recommended an underweight position in the company on 12th July, and a neutral position on Eastern Province and Qassim Cement.
The cement index on the Tadawul slumped for much of last week, closing at 3,891.12 yesterday from 3,946.7 on 11th July. It is down almost 25 points for the year to date.
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