Displaying items by tag: Saudi Arabia

Saudi Arabia: Yanbu Cement has posted a net profit of US$57.6m for the second quarter of 2012 compared to US$40m for the same period of 2011. This represents a increase of 44% over the US$38.7m made in the previous quarter. The company made a gross profit of US$62.7m in the second quarter, a 48% increase year-on-year.

Over the course of the first half Yanbu's net profit went from US$66.2m in 2011 to US$96m in 2012. Its gross profit for the six months was US$104.8m compared to US$71.7m in 2011, an increase of 46%.

Yanbu said that the the reason for increase in its net profit was an increase in both production and sales, helped by a new cement line and an increase in cement demand.

Saudi Arabia: Southern Province Cement Company has estimated that its net profit for the second quarter of 2012 will be 9.6% higher than the comparable period in 2011 at US$69.9m compared to US$63.7m.

Its estimated gross profit during the second quarter was US$71.9m compared to US$67.2m, a year-on-year increase of 7.1%. The company estimated its operating profit during the second quarter as US$69.8m compared to US$63.7m for the corresponding quarter of 2011, an increase of 9.6%.

Over the course of the six months to 30 June 2012, Southern Province estimates that its net profit will be in the region of US$154.6m compared to US$124.0m and that its operating profit will be US$146.7m compared to US$125.1m in the corresponding period of 2011.

Southern Province said that the rise in net profit for the second quarter and for the six month period was due to operation of the second production line at its Tahama plant, which had no unforeseen stoppages. There was also an increase in demand for cement in the local market.

The company noted that its second quarter 2012 net profit was marginally weaker than that of the first quarter of 2012 due to industry-wide pressure from the Ministry of Commerce to reduce cement prices.

Saudi Arabia: Saudi Cement Company (SCC) said that its net profit for the three months to 31 March 2012 surged by 54.4% year-on-year to US$86.8m from US$56.2m in the year to 31 March 2011.

The company attributed the increase to higher sales volumes as a result of rising local demand. Its operating profit increased to US$87.8m for the first quarter of 2012 from US$58.1m a year earlier.

Saudi Arabia: Southern Province Cement (SPC), the Kingdom of Saudi Arabia's biggest cement firm by market value, and Chinese engineering company Sinoma have signed a US$188m contract for the installation of a third production line at SPC's plant in Tahama.

The turnkey contract will be executed over a period of 24 months. Once completed, the third production line will have a clinker capacity of 5000t/day. SPC said that it will use its own funds to finance the project. In early March 2012, the Saudi company announced that the second production line at the Tahama plant started commercial production, bringing SPC's total capacity to 23,000t/day.

SPC, one of the nine listed cement companies operating in the Kingdom, is based in Abha, southwestern Saudi Arabia. It operates factories in Jazan, Bisha and Tahama.

Saudi Arabia: Yanbu Cement has announced that its first-quarter net profit for 2012 rose by 43% year-on-year to US$38.6m. Earnings per share for the first three months of the year rose to US$0.37 from US$0.26 in the year earlier period. It added that its first-quarter operating profit surged by 44% to US$39.9m.

Meanwhile Yamama Saudi Cement has said that its first quarter profit surged by 54% compared to the first quarter of 2011 to US$74.1m due to higher sales and better operational efficiency. Its first-quarter earnings per share came in at US$0.37 compared to US$0.35 in 2011, according to a statement. Its operating profit for the three-month period rose to US$76.5m, compared to US$49.1m in the same period of 2011, a year-on-year rise of 55%.

Saudi Arabia: The Qassim Cement Company has reported that its net profit for the first quarter of 2012 grew by 7.65%, from US$39.2m in 2011 to US$42.2m.

The firm added that its consolidated gross profit rose by 4.87% to US$45.5m, up from US$43.4m in 2011. Its consolidated operating profit in the quarter went up by 6.93% to US$43.2m, compared with US$40.44m in 2011. Qassim Cement's first-quarter consolidated net profit increased by 8.45% from US$39m as reported in the fourth quarter of 2011.

Yemen: It is being reported that large quantities of Saudi Arabian cement are being smuggled to Yemeni markets due to the decline of local supply and an increase in cement demand in Yemen. The head of the financial sector of the Public Cement Corporation, Abdul-Malik Al-Qirshi, told Yemeni press that the trucks that transfer Yemeni salt to the Saudi town of Jazan, return to Hodeida in Yemen carrying Saudi cement. Exports from Saudi Arabia have recently been blocked by the government there.

Al-Qirshi explained that Saudi cement increasingly flows to Yemeni markets due to the suspension of production at some Yemeni factories. He made it clear that the Saudi cement is largely purchased in Hodeida and on the Yemeni-Saudi border, going on to add that Saudi cement is sold at nearly twice the price that it is in Saudi Arabia.

"Despite the fact that Saudi cement is smuggled to the Yemeni markets, there is impure cement of unknown-origin that is packed in Saudi-made bags" he added. "This occurs due to weak control on the Yemeni market." With the exception of Amran and Al-Watania cement factories, all the other five cement factories in Yemen have halted production.

Kuwait: Gulf Cooperation Council (GCC) cement companies have emerged from two years of decline following the credit crisis with a strong 14.2% increase in revenue, according to a report by Global Investment House. Sector profits, however, increased by 2.7% in 2011. Revenues reached US$4.6bn in 2011 compared to US$4bn in 2010. Net profits increased from US$1.44bn in 2010 to US$1.48bn in 2011.

By country, Saudi Arabia, Oman, United Arab Emirates (UAE) and Kuwait overturned declining revenues in 2010 and all four countries reported increasing sales for 2011 except Qatar. UAE, which witnessed declining sales revenue since 2008, enjoyed a 5.9% increase in sales to reach US$940m. Yet net profit was negative for the first time since the researchers started to compile UAE cement data.

Oman witnessed a 12.8% increase in sales revenue reaching US$342.3m in 2011, the second highest revenue in Oman's cement history. However Oman reported a 39.4% decrease in profits in 2011. Kuwait reported a 5.4% increase in revenue reaching US$66.9m in 2011, but it posted a 47.1% decrease in net profits compared to 2010. Qatar was the only GCC country reporting declining sales and profits. Saudi Arabia posted a healthy 22.6% increase in sales revenue and a 25.2% increase in net profits in 2011.

According to Saudi government officials, Saudi Arabia will spend an estimated US$400bn on large infrastructure projects from 2012 until 2017. Ever since the country banked upon diversification, the cement sector witnessed a tremendous pick up in demand from less than 20Mt in 2005 to 49Mt in 2011. In the wake of increasing demand locally, the government imposed a conditional ban on cement exports in 2010 that further pushed demand. Saudi Arabia lifted a ban on cement imports in March 2012 and neighbouring exporter nations, Oman and the UAE, are expected to benefit greatly from the change.

Saudi Arabia: Government spending and increased economic activity will fuel strong demand for cement in 2012, according to a new report from NCB Capital.

The report, which concentrated on Southern Cement and Saudi Cement due to their spare capacity and high stock levels, indicated that cement prices increased by an average of 14.1%. Demand is anticipated to grow by 10% in 2012 and by 8% in 2013, driven by increasing government spending on infrastructure projects combined with private projects. Sales are expected to grow by 10.8% in 2012 to reach 52.2Mt.

According to the report, market activity is shifting from the central region to the western region of the country. The western region is now the centre of mega projects such as the Haramain railway, Jeddah's new airport and major drainage and other infrastructure projects. Demand in the central region nonetheless remains strong but has stabilised.

Fuel shortages remain the key supply constraint. Cement industry players believe the reason for the ongoing higher prices faced by retail buyers is mainly due to higher costs from the transportation companies. For example, a transportation company's truck that was able to make two trips a day to the cement factory can now only make one trip every three days due to the high demand and backlog at the local cement plant, thus increasing the cost for transportation companies. It is believed that prices will remain elevated in the short term due to the supply constraints and also in the medium term due to the strong demand outlook.

The economics team at NCB estimated that the 2012 government spending was 13% higher than budgeted at U$S280bn in addition to the US$32bn allocated to build 500,000 housing units. "We believe the elevated levels of government spending, particularly housing projects, will boost demand for cement," the report said.

Saudi Arabia: Saudi Arabia's Ministry of Commerce and Industry has removed restrictions that had been in place on imports of cement, saying that it "has adopted several decisions to ensure the stability of the price of cement and its provision in the local market." The decisions include halting exports, making it obligatory for cement factories to work at full capacity and making producers bear the freight costs to the areas of increased demand. It expects that these measures will mean that cement reaches consumers at a 'reasonable' price.

This is not the first step taken to ensure that the cement supply keeps pace with the huge demand for cement that the construction boom has created. Earlier in 2012 Saudi cement factories were ordered to open up new production lines. These are estimated to have added an extra six million bags to the Kingdom's production every month, taking its total monthly production to about 80 million bags.

The moves come following complaints by cement consumers in remote areas that the price of cement had skyrocketed in recent months, with some accusing dealers of fixing artificially high prices. Saudi Arabia currently has an estimated US$163.5bn-worth of construction projects in the concept phase. It is understandable that it wants to secure the best value cement possible.