RAK Cement Company recorded a net loss of AED11.4m (US$3.1m) in 3Q11, compared with a profit of AED1.1m in the same period of last year. This is the company’s second consecutive net profit quarterly loss.
Selling prices have witnessed a decline compared to the previous year, in addition the company posting lower sales volume due to Ramadan. However export sales grew 125.9% in 3Q11 to reach 52,600t as the company received tenders from Kuwait, Oman and Iraq.
Cost of sales dropped to AED50.6mn in 3Q11 as compared to AED51.1m in 3Q10. Cost per ton increased by 3.2% as compared to the previous quarter. As per the company, raw material prices have declined in the UAE, and we expect them to remain the same in 4Q11.
During the current quarter RAKCC produced 175,400t of clinker and 218,700t of cement, down by 41.2% and 11.8% respectively when compared with 3Q10. RAKCC was able to dispatch 222,500t of cement in both local as well as export markets, down by 4.0% as compared to 3Q10. Average realisation prices during the quarter reported a drop of 18.5% to AED188.0/t compared to AED230.6/t in 3Q10.
While analysts at Global Investment House expect the slowdown in the UAE cement market to continue, it forecasts the outlook for RAK Cement to be better in 4Q11 as the company has received sizable orders from Kuwait and Iraq.