Umm Al Qaiwain Cement produces losses for 2011
Supplier sums up dearth in UAE demand as sales are half that of 2010
Umm Al-Qaiwain Cement Industries sold half as much cement as last year over the last three- and nine-month periods to produce steep losses to reverse the profits from the previous year.
The Emirati supplier said revenue for the third quarter reached AED 15.3m ($4.16m), down from AED 31.13m ($8.47m) from the previous year, though sales costs declined by a similar proportion. Impairment losses and price readjustments from its share portfolio – which occasionally helps materials turn a profit when sales fall – meant the company post a AED 7.84m ($2.13m) loss for the period.
Over nine months, net profit declined from AED 7.3m ($1.98m) to make a loss of AED 5.7m ($1.55m) this year, as revenue slid to AED 4.7m ($1.27m) from AED 8.18m ($2.22m) in 2010 and the cost of sales soared to be roughly the same value as the sales themselves.
Net cash from operating activity is almost a third that of last year, as at 30 September, the company stated in its financial report for the period. Its dividend to shareholders was almost four times the level of the previous year over the period.
Cement and other materials companies in the UAE have seen a steady decline in sales, as the slowdown in what was the region’s largest building market, Dubai, slowed greatly in the wake of the global financial crisis that drained liquidity and speculators from its real estate market.
Some suppliers in the country have been selling into Oman to maintain sales levels, most of them posting losses for the year. RAK Cement, which posted a loss of AED 11m ($3m) for the third quarter, has since expended its product line to include cement for oil wells.