Gulf Cement sees half-year profits almost half

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Gulf Cement Company has seen its profits slashed by almost a half in a six-month comparison to 2009 and by more than three-quarters for Q2 against the same period last year, the company has revealed.

The Abu Dhabi-listed manufacturer posted one of the most dramatic sets of after-tax results today to further demonstrate the challenge in the cement market which has seen smaller orders meet higher cost of production. Net profits tumbled 47% from AED70.3 million to AED37.56 million.

Pre-tax revenue for six months compared to January- to-June in 2009 declined from AED392.77 million to AED302.4 million, down 23%, with a fall of 13.2% when comparing the second quarter 2010 to the same period in 2009.

Its statement shows a great increase in its exports, from AED7.4 million for the first six months last year to AED115.7 million this year, though this part is as yet unaudited. Export sales for the second quarter 2009 to the last three months leaped by more than ten times to AED58.9 million. At the same time, the cost of sales increased, by 11.9% between the first six months to that of 2009.

The company’s reserves, however – a combination of the money it has put aside by statute and voluntarily -have remained the same.

Gulf Cement Company highlights the fall in cement prices as the principle cause of its fall in net profits.

The results follow similar declines across the GCC for manufacturers. Yesterday Saudi-based Southern Province Cement Company posted a 13% fall in net profits for the second quarter of this year to that of 2009, to SR185 million from SR212 million.

Qassim Cement saw net income fall 8.3%, from SR148 million to SR135.8 million, although, Damman-based Eastern Province Cement found an increase of 1%.

However, government statistics have found that the cement sector in Saudi has increased its production overall.

Gulf Cement Company says that it will have its new 5,000 tonne-capacity plant operational within the next three years, and its already in talks with European construction firms regarding projects.