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Saudi Cement reports net profit of $35m in Q1

June 2019

Saudi Cement reported a net profit of SR132 million ($35.19 million) for the first quarter (Q1) of 2019, a 7 per cent decline year-on-year and a 6 per cent growth compared to the previous quarter.

The results were slightly ahead of the estimate of SR127 million ($33.86 million) by Al Rajhi Capital and the consensus forecast (also at SR127 million), said an A Rajhi report.

The change was primarily due to healthy growth in top-line (18 per cent yoy, 28 per cent qoq), driven by significant jump in cement and clinker export volumes and to some extent increase in average selling cement prices, though the price rise is not steep as compared to the peers, said the report.

Saudi Cement reported a revenue increase of 18 per cent yoy to SR390 million ($103.9 million), driven by higher export sales volume of cement and clinker.

Gross profit grew at a slower rate than revenue to SR181 million ($48.26 million - +7 per cent yoy), implying gross margin contraction to 46 per cent (Q1 2018: 51 per cent). However, operating profit declined 5 per cent yoy, due to higher than expected opex (~92 per cent jump yoy), the report highlighted.

Cement export volumes increased to 254,000 tonnes, while clinker volumes (mainly exports) jumped to 406,000 tonnes.

Contrastingly, local cement sales volume declined 16.5 per cent yoy to 1,193,000 tonnes. Average selling price (cement and clinker combined) declined 7.4 per cent to SR211 ($56.25 million) per tonne on higher clinker volumes, said the report.

Going forward, the company is expected to continue focussing on exports in light of weak domestic demand, it said. 




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