Al Jouf Cement Co has warned of a significant rise in production costs following recent fuel price adjustments announced by Saudi Aramco.
In a disclosure to the Saudi Exchange (Tadawul), the company said it had assessed the financial impact of higher prices for fuel products used in cement production and supporting services. The study indicated that direct production costs are expected to increase by around 11 per cent.
In addition, Al Jouf Cement said higher diesel prices used in transportation and logistics operations are likely to add a further three per cent to costs. As a result, the company estimates a total increase in production costs of approximately 14 per cent.
The company said it is continuing to evaluate the overall impact of the cost increases on its financial results. It is also reviewing potential operational and technical measures that could help mitigate the effect on profitability.
Al Jouf Cement added that any material developments related to the fuel price adjustment or mitigation measures will be disclosed in accordance with applicable regulatory requirements.
