UAE declining profits

UAE declining profits
Published: 30 October 2009

Cement firms in the region and especially in the UAE will continue to announce below par results until the end of 2010, senior industry officials said yesterday.

Cemex yesterday said sales figures fell in most markets, including the Middle East, bringing down its third-quarter net income for a sixth straight quarter.

On Tuesday UAE-based Union Cement announced that its third-quarter profit plummeted 69 per cent as sales halved.

A senior official of a RAK-based cement firm told Emirates Business that business in the UAE continues to fall and the companies will not be able to show better profits for another year.

"We are not expecting a revival of fortunes at least until 2011. The market is pretty bad and unless several major construction projects that were suspended resume, we will not see any major profit making," said the official who did not want to be named.

Union Cement said its net income dropped to Dh10.8 million from Dh35.4m a year earlier. The company said in a filing to the Abu Dhabi bourse on Tuesday sales for the three-month period fell 49 per cent to Dh152m.

Deepak Vaishnav, Marketing Manager of Sharjah Cement, yesterday said the current market situation continues to be weak.

"Following a drop in demand and excess availability of the product in the market we are witnessing a drop in prices. If the situation continues to go down further we will see the prices falling further," said Vaishnav.

An official from Fujairah Cement recently said the situation continues to remain bleak due to a drop in demand of 30 to 40 per cent, coupled with an increase in the cost of production.

Source: Emirates Business 24/7