Najran Cement 3Q12 net profit down, Saudi Arabia

Saudi Arabian cement company Najran Cement posted a net profit of SAR36.2m (US$9.7m) for the third quarter of 2012 compared to SAR83.3m in the corresponding period of 2011, representing a fall of 56.55 per cent.

However, on a QoQ basis, net profit increased by 36.19 per cent compared to the second quarter of the year. The reason for net profit of third quarter being higher than the second quarter 2012 is that second quarter was subject to bear additional costs for IPO and arrears of royalty for the year 2011.

Gross profit during the quarter was SAR52m compared to SAR93.3m for the same period of 2011. Operating profit was SAR45m for  3Q12 compared to SAR87m in 3Q11, down 48.31 per cent.

Net profit for the nine months is SAR143m which when compared to SAR23m of the previous year registers a decrease of 37.56 per cent.

The reason for lower net profit of nine months ended and third quarter of 2012 when compared with corresponding periods of last year is as follows;

The sales volumes remained lower than last year due to non availability of sufficient clinker stocks. The carried over clinker stocks grossly depleted last year and in the first nine months of current year as the company was not able to equate current production with the demand.