Al Yamamah Steel Industries has posted revenue of SR406 million ($108 million), for the third quarter of the year (Q3), marking a year-on-year (y-o-y) increase of 2.7 per cent, higher than an estimate of SR374 million, a report said.

Higher commodity prices led to a better realisation of the construction product price, which grew 54.8 per cent y-o-y, reported Al Rajhi Capital, a leading provider of financial services in Saudi Arabia.

On the flip side, the construction product volume declined 33 per cent y-o-y, mainly due to inventory management exercise to avoid exposure to higher cost inventory (as the steel prices remained elevated during Q3 2021) in case of any slump in demand.

Gross profit increased more than 3x y-o-y to SR104 million, as the margins expanded to 25.6 per cent (8.2 per cent in Q3 2020 and 22.3 per cent in Q2 2021) due to favourable pricing environment for the final product.

“Improvement in gross income and lower finance cost, on the back of debt reduction, resulted in ~70x y-o-y growth in net income to SR65 million; this was better than our estimate of SR36 million,” said Al Rajhi Capital in the report.