Bumper profits for cement producers
Cement producers around the region enjoy the healthy profits
Cement companies in the region have delivered a bumper set of first half profits on the back of booming orders throughout the GCC.
And despite the launch of several major capacity expansions by producers throughout the region, prices are expected to remain firm in the second half of 2005.
Hisham Moussa, research associate at HSBC, said: “For the rest of this year, local demand will consume all of the companies’ production.”
“It is also worth remembering that only around 65 or 70% of the extra capacity that is announced actually ends up
on tap,” added Zahed Chowdhury, GCC investment analyst at the bank.”
Four of the largest cement producers in Saudi Arabia have announced profit increases for the first half of the year.
The biggest gains were reported by Arab Cement, where profits rose by a whopping 44% to reach US $42.7 million (SR160.2 million). Saudi Cement Company’s first-half year net profit rose by 24% to stand at $66.4 million (SR 248.9 million).
Qassim Cement, the smallest listed cement producer in the country, reported more modest gains with first-half net profits rising by 4% to hit $35 million (SR131 million).
Meanwhile, rival producer Yamamah Cement saw half-year profits rise 2.5% to $55.1 million (SR206.9 million).
The company also told shareholders that part of a new production line would start commercial operation by the end of August.
Other producers outside KSA have also recorded rising first half profits, with most companies now working at or near full capacity. Ras al-Khaimah Cement Company’s first-half net profits rose 64.6% to $14.8 million (AED54.5 million).