Qatar National Cement sees nine-month profits soar

Revenue fell against 2009, along with sales costs.

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Qatar National Cement Company has bucked the regional trend for cement manufacturers by posting a hire profit for the first nine months of this year than the same period in 2009.

The Doha-based manufacturer of cement and lime revealed gross profits of QR385.2 million from 275.8 million last year, up 39%, produced by a decrease in sales costs that offset a fall in revenues, which were down more than 30%.

A fall in finance charges meant that the after-tax income reached QR378 million, up 16.9%.

The results continue an unusually strong year for a cement firm in the Gulf, having achieved a 1.3% increase in net profits for the first six months compared to the same period last year; again, despite a fall in revenues.

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The company’s total assets and equity remained steady over the year. Its main plant is in Umm bab.

Hettish Kumar, senior financial analyst at Global Investment House in Kuwait, told CW at the release of the six-month results that the company had outperformed due to its position as the dominant supplier in the country. “The majority of business goes to QNCC. It has a good, local supply of raw materials and fresh plants, and its margins are good.”

By contrast, Saudi firms have seen big falls in profits as there are many companies competing to supply to the same domestic projects. Cement firms in Oman and UAE have also seen sales values eroded by a shortfall in building activity, leading to a few firms selling into their neighbouring country.

The supply of cement and other key building materials have been more plentiful in Qatar over the last few years, according to contractors. Ahmad Matar, CEO of the Al Arrab Electro Mechanical Engineering, which is providing MEP work for a number fo the towers in the upcoming Pearl Qatar, said the situation had improved greatly from a few years ago, where cement needed to be imported from UAE

The company’s shares fell 0.5% to QR86.6, up almost 14% since the start of June.