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Sharjah Cement's pre-tax profit falls 17%

Sharjah Cement and Industrial Development Co’s (SCIDC) 2017 pre-tax profit declined by 17% year-on-year.

The UAE's oversupplied cement market is facing a tough time.
The UAE's oversupplied cement market is facing a tough time.

Sharjah Cement and Industrial Development Co’s (SCIDC) pre-tax profit for 2017 has declined by 17%, year-on-year.

UAE-based SCIDC posted pre-tax profit of $15.5m (AED57.1m) for 2017, a drop of 17% compared to the $18.8m (AED69.3m), the company reported a year earlier.

While SCIDC saw pre-tax profit slide in its full-year financial results covering the 12 months to 31 December 2017, the year was by no means a bad one for the business.

READ: Oman cement firm revenues fall by 22% 

The Abu Dhabi Stock Exchange-listed company saw revenue and the cost of sales grow in the same period.

SCIDC, which manufactures cement, paper sacks, and synthetic ropes, said revenue rose from $166m (AED612m) in 2016 to $176m (AED649m) last year. This is a year-on-year rise of 6%.

Cost of sales increased from $147m (AED543m) to $161m (AED592m).

Revenue and cost of sales growth helped to offset the double-digit drop in pre-tax profit for SCIDC. This meant that the company’s bottom line was relatively unaffected when comparing 2016 with 2017.

The company could not be reached to comment on its latest round of financial results at the time of writing.

Due to excess market capacity, the UAE’s cement sector is facing tough competition right now, with some companies selling product at a competitive price to remain financially robust.

Last month, Oman’s largest cement producer, Raysut Cement Company, saw revenue drop by more than a fifth after heavy competition from UAE cement producers and rising energy costs hit its sales revenue and earnings.

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Construction Week - Issue 759
Feb 22, 2020