Arabian Cement Company (ACC) has described its 4Q15 financial results as "mixed". According to Egypt Daily News, the company added that nothing is alarming with regards to profits, losses, and the operating performance. During the quarter, the company’s cement selling price registered EGP497/t (US$55.89/t), three per cent higher than ACC had previously predicted.
However, revenues and profits both declined compared to the previous quarter. The company reported EGP338m (US$38m) in revenues, EGP45m (US$5m) lower than the revenues recorded in 3Q15 and EGP178m lower than the revenues of 4Q14.
The company’s profits declined to EGP111m during 4Q15, EGP96m lower than the profits registered during the same quarter a year earlier. During 3Q15, profits totalled EGP181m. The price of cement since February increased, rising to EGP700/t and coinciding with de-stocking activities from cement producers.
“We think 1Q16 is likely on track for a positive earnings surprise, despite foreign currency challenges, as higher cement prices will compensate for any drop in volumes, which will reflect in a short term boost to margins,” the company said.
Much of the company's 4Q15 results were affected by the dollar crisis. The dollar shortage has been an ongoing problem for domestic and foreign investors alike.
“The foreign currency shortage was highlighted in the company’s balance sheet … as suppliers’ balances and dues to the parent company surged significantly, flagging the difficulties faced in sourcing US$ to pay for coal cargos and repatriate profits,” the company said.
“Even cash balances are up, as ACC sets aside the foreign currency debt instalments due in EGP until sourcing US$ becomes more accessible,” a company spokesperson added.
The company stated that during the first quarter of the year, the cement market has been “highly volatile”.