Qassim net profit falls, Saudi Arabia

Qassim net profit falls, Saudi Arabia
Published: 19 July 2010

Qassim Cement Company announced its 2Q-2010 results. Net profits witnessed a decrease of 8.4%YoY in 2Q-2010 to SR135.8mn as sales revenue decreased by 8.7% YoY to SR255.5m in 2Q-2010.

Sales volume declined by 8.5%YoY to 1.11mn tons in 2Q-2010 as unlisted players Riyad, Najran, Madina and Western Cement increased their total local dispatches by 61.2%YoY to 2.41Mt in 2Q-2010 absorbing 77.2% of the total growth in industry local dispatches during 2Q-2010 compared to the corresponding quarter last year thus squeezing the space in the domestic market.

However, gross margins improved to 58.5% in 2Q-2010 compared to 56.6% in the corresponding last year as average realisation price increased by 2.2%YoY to SR231.1/t  in 2Q-2010. Strong domestic demand has halted the decline in prices which was witnessed in previous quarters.

On a cumulative basis, net profits declined by 6.3%YoY in 1H-2010 to SR281.0mn despite the increase in volumes sold by 4.0%YoY to 2.31mn tons as average realization prices declined by 2.8% YoY to SR228.5 in 1H-2010. Ban on cement exports and increase in domestic production had an impact on gross margins which declined to 58.0% in 1H-2010 compared to 59.1% in 1H-2009.