Saudi cement sales rise 13% last year
Resurgent last three months reflects wider upturn as projects emerge
Cement sales in Saudi Arabia rose 13% last year,as the emergence of residential, commercial and infrastructure projects throughout the Kingdom require building resources.
Figures released by Argaam, the web portal for business statements, found that December saw a particularly strong rise. Total sales rose from 3.48 million tonnes to 3.87 million tonnes, up 11%, with fourth quarter sakes rising 10% to 10.72 million tonnes.
Yanbu Cement Company saw the quantity and value of its sales in the fourth quarter soar in a difficult year that saw revenues fall and further competition dilute the market.
“The reason [for the] increase in fourth quarter profit due to increase in sales quantity and value,” it said in a statement to the Tadawul stock exchange in Riyadh. Fourth quarter net profits jumped to SAR 99.5 million from SAR 81.58 million against the same period last year, up 22%.
The supplier of cement and clinker saw operating profit rose from SAR 76.8 million to SAR 103.9 million – a rise of more than 35.2% - with gross profits rising almost a third.
But net profits for the full year fell 10.7%, from SAR 482 million to SAR 430 million, with operating profits slumping to SAR 438.7 million, down 9.7% - an echo of the squeezed margins felt by many in the sector in 2010.
Yanbu Cement was only one two companies not to have seen an increase in sales last year, the other company being Qassim Cement Company, according to Argaam.
“The reason of [the] decrease over the year is [the] decline in the quantity and value of sales is a result of intense competition from the entry of new cement companies and a near doubling of capacity plus [the] export ban.
Yamamah Saudi Cement Company, the third-biggest supplier in Saudi Arabia, saw a 10% rise in fourth quarter net profits – up to SAR 160 million – to take full-year net profits up an estimated 17% rise in net profits in 2010.
Last October saw the listing of Al Jouf Cement Company, a closed joint stock maker of Portland and sulphate-resistant cement, after a brief offering period. Analysts in Bahrain expect “three or four” further companies to list this year.
Yanbu Cement stock closed down 0.42% to SAR 12.4 per share.