Qassim Cement Company said it has seen net profits rise more than 30% against the previous quarter. Net profit increase by 1.3% YoY and 30.5% QoQ to SAR147.2m. Gross profit was up by 3.8% to SAR162.7m and operating profit increased 2.9% YoY to SAR151.7m.
Qassim’s results exceeded Global Investment House’s (GIH) 1Q11 net profit estimate of SAR138.7m by 6.1%. The company cited increase in average realisation price and improved operating performance of the subsidiary company as the reason behind the increase.
GIH highlighted that cement companies located in Saudi Arabia’s Central region are apparently benefiting from higher realisation prices due to increased construction activity as can be gauged by better than expected performance of Yamama Cement and Qassim Cement in 1Q11. The improvement in profitability has come despite the decline in Qassim’s cement dispatches by 7.8% to 724,000t.
The company said in January that the dip in fourth quarter results – in which it posted after-tax returns of SAR112.78m, down 35% – was due to the fines and compensation derived from the delayed implementation of the work “of the production line no.3 project from the contractors and suppliers”.