GCC's cement companies see a double-digit rise in 1Q13 turnover and profit

GCC's cement companies see a double-digit rise in 1Q13 turnover and profit
Published: 10 June 2013

Tagged Under: Global Investment House GCC 

Combined net profits of the GCC's listed cement companies grew to US$585.3m during the first three months of the year, according to analysis by Kuwait's Gulf Investment House. This is a 16.9 per cent increase on the US$500.9m achieved last year. Total sales increased by 13.8 per cent during the quarter to US$1.4bn.

Prices fell slightly to US$66.10/t, compared with US$66.70 in the same period last year. This was due to a drop in prices in Saudi Arabia, although the increased volume of product sold in that country meant that Saudi cement firms saw an average profit increase of 8.2 per cent.

The report said that the highest levels of sales increase were in Qatar, however, where revenues grew by 10 per cent.

"Oman stood second and reported a growth of six per cent, while Saudi Arabia reported an increase of 3.2 per cent," GIH's report said.

Their listed cement producers jumped by 55 per cent – largely due to increases in non-core income.

"Such a high growth in the non-core income was possible because majority of the UAE listed companies are significantly invested in equity and real estate market of UAE and both of them witnessed significant improvement during the period."

GIH calculated that with sales of over US$1.4bn and an average selling price of US$66/t, the GCC's listed operators sold around 22Mt of product during the quarter.

It added that when output from newly-listed and unlisted competitors are factored in, demand during the quarter was around 26-27Mt, which should mean that around 100Mt of cement is sold in the GCC this year.

Meanwhile, the volume of cement exported from the UAE during the first nine months of 2012 grew by 11 per cent to over US$269m, according to Emirates News Agency.