Yamamah Saudi Cement sees 17% net rise in 2010
Riyadh firm cites greater efficiency for quarter-on-quarter gain
Yamamah Saudi Cement Company, the third-biggest supplier in Saudi Arabia, saw an estimated 17% rise in net profits in 2010 against the previous year as more efficient production and a slew of projects in the area filter through to the balance sheet.
The Riyadh-based manufacturer saw after-tax gains potentially hit SAR 657 million compared to SAR 562 million from the previous year. Fourth quarter results net profits rose 10% to SAR 160 million against the same period the previous year, rising 14% against the third quarter 2010, which stood at SAR 140 million.
The company produces Portland and sulphate resistant cements, clinker, and cement packing sacks. The last year has seen sales values and volumes erode for much of the sector, as the government curbs on exports have created an increasingly saturated domestic market.
However, analysts at NCB Capital have highlighted in a report that the company’s location leaves it well-placed to serve the cement demand in the central region, which the bank estimates at 40% of the total need for the commodity. The company posted a 19% rise in net profit for the first nine months of 2010 compared to an industry average of 3%.
The fourth-quarter operating profit is an estimated SAR 166 million, compared to SAR 150 million for the same quarter of last year, up 11%.
The company said the upturn was a result of increased marketing and production efficiency, adding to investors that it had reclassified some comparative figures for the previous period. Umar Faruqui at Global investment House advised a ‘buy’ on the stock, which closed up 0.95% to SAR 52.75 per share yesterday, on 28th November.
Earnings per share are expected to be SAR 4.87 for the year, compared with SAR 4.16 for the previous year.