Cement selling prices were lower by 16.4% to OMR26.2/t during the quarter compared to OMR31.3/ton in 1Q10. This double-digit decline in cement prices resulted in gross margins falling to 36.9% in 1Q11 as against 45.1% in 1Q10. Sales volume were down 1.6% to 0.49Mt because of an inflow of cheaper cement from neighbouring countries.
The incorporation of the 2011 results together with a quarter delay to the commissioning of a third clinker line reduces the company’s net profit estimates for 2011. The company’s share price has seen a 5.3 per cent increase in the last month. Global Investment House forecasts a 5-10% decline in the share price because of a lower than expected profit.
