Saudi Arabian Amiantit Q3 profits fall 40% on 2009

Amiantit shares fell more than 7% yesterday.

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Saudi Arabian Amiantit Company, the construction materials manufacturer, saw profits fall more than 40% for the third quarter against the same period last year, hitting its share price in trading yesterday.

The company posted SR42.4 million against SR72.4 million a year ago, and falling from the SR45.6 million from the second quarter. Yesterday 7.2% was knocked off its share price to close at SR17.15, just short of a five-month low of SR17 per share having climbed for much of the last six weeks.

The company also posted a 14% fall in profits for the first nine months of the year, at SR128 million.

Saudi Arabian Amiantit Company produces pipes made of concrete, fibreglass and iron, as well as some fit-out and insulation products. Its subsidiaries include Amiantit Fiberglass Industries Ltd (70%), Amiantit Rubber Industries (80%), Ameron Saudi Arabia (69.7%), Bondstrand (60%), Saudi Arabian Ductile Iron Pipes Company (75%), Saudi Arabia Concrete Products (Sacop - 54.8%), Arabian Fibreglass Insulation Company (51%), and Saudi Arabia Plastic Products (48.2%) – which contribute to a market capitalisation of SR1.98 billion. Overall sales fell 5% to SR2.284 billion against last year.

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The results continue a difficult third quarter for materials suppliers, even in Saudi Arabia, one of the Middle East biggest construction markets. So far this month Yanbu Cement Company and Saudi Cement Company both saw net profits slip against second-quarter results – down 16% and more than 26% respectively. Southern Province Cement Company saw net profits fall from SR185 million in the second quarter to SR119 million in the third. Only Saudi Cement saw an increase against the third quarter of last year, up 13.7%.

Some analysts in Bahrain expect a consolidation of the nine listed cement companies in Saudi Arabia, based on a strict exporting criteria that has encouraged domestic sales but forced traders to slash prices.

Raj Sinha, head of equity research HSBC Bank Middle East, gave an 'overweight' recommendation for Saudi Arabian Amiantit Company in July.