Oman Cement Q1 profit falls

Oman Cement Q1 profit falls
Published: 29 April 2008

Oman Cement Co , the country’s biggest cement firm by market value, posted its smallest profit in five quarters, missing analysts’ forecasts, as production fell on less availability for raw materials.

Its shares plunged as much as 10 per cent after it said net income in the three months to March 31 declined 19.3 per cent to OMR3.99m (US$10.36m), compared with OMR4.95m in the year-earlier period.

The profit missed all three forecasts in a Reuters survey last month that ranged from OMR5.02m to OMR6.3m.

Sales retreated almost 17 per cent to OMR11.74m, down from OMR14.11m a year earlier, the company said in a statement on the Oman bourse website.

Production dropped to 448,025t from 534,932t a year earlier, while output of clinker held about steady at 275,290t, it said. It imported about 21 per cent less clinker in the quarter, without explaining why.

"Production (of clinker) is marginally lower compared with the previous year mainly due to shutdown of two kilns for major maintenance and re-bricking," the firm’s chairman, Qahtan bin Yarub al-Busaidy, said in a statement.

"The production of cement has been lower during the period due to the reduced availability of clinker," he said.

Demand for cement has been surging across the world’s biggest oil-exporting region, where governments are ploughing windfall revenues from a near six-fold rise in oil revenues in the last six years to develop real estate and infrastructure.

"We were told by our suppliers that imported clinker would now take six months to order since the global demand has risen," an Oman Cement official, who declined to be identified, said.

Busaidy said the firm was expanding to try to meet demand.

"In order to meet the increased demand for cement, the company is continuing to procure clinker to be able to producer additional cement," he said.