The cement industry in the Gulf states benefits from growth and expansions in several other sectors. The cement sector is expected to see more expansions and profitability, thanks to the planned and current projects in the Gulf, which are estimated at around $2.5 trillion.
Amid the current slide in crude prices, the GCC countries are forecasted to continue their efforts to reduce reliance on oil revenues and boost investments in infrastructure projects that constitute the pivot of the area’s construction boom.
A total of 27 cement companies listed in GCC stock markets posted their financial results for the first nine months of FY14, showing $1.61 billion combined earnings, with 3.4% growth compared with $1.56 billion reported in the same period a year earlier.
These earnings were boosted by Saudi Cement Co. that took the lion’s shares in these earnings.
GCC cement companies posted 21.2% growth in Q3 net profit to $435 million, compared with $359 million in Q3-13. However, these earnings fell 26.86% compared with $594 million in Q2-14.
Saudi Arabia accounted for the biggest portion of these earnings. Although KSA dominated 48% only of these companies, it made up 78.5% of registered earnings for the nine-month period.
It was followed by the UAE with 29.6% of the number of companies and 5.71% of their combined earnings.
Qatar took the third position with 3.7% of companies and 5.66% of earnings, followed by Oman with 7.4% of companies and 5.2% of earnings.
Kuwait came last, as it accounted for 11% of companies and 4.9% of earnings.
At the level of profit growth, Mubasher statistics showed that the UAE took the leading position with 60.7% growth, as it listed cement companies posted $91.97 million net profit, compared with $57.22 million in the same period a year earlier. The eight UAE cement companies reported $21.8 million earnings in Q3, with 127.7% growth year-over-year from $9.57 million.
Kuwait came second with %12.5 profit growth, with a total of three companies posting $79.21 million net profit in the nine-month period, compared with $70.41 million in the year-ago period. These companies also made $17.78 million earnings in Q3-14, with 26% rise y/y from $14.11 million.
One Qatari firm, Qatar National Cement, posted 3.1% rise in nine-month period to $91.21 million, compared with $88.46 million. Meanwhile, net profit for the third quarter increased to $25.85 million from $23.76 million.
The fourth rank was taken by Omani companies that posted 2% growth in nine-month profit to $83.83 million, compared with $82.2 million. These companies also made $33.14 million net profit in Q3, representing a decline by 16.6% year-over-year from $23.63 million.
Earnings of Saudi cement companies rose 0.4% to $1264 million from $12258 million. Q3 earnings also rose 21.6% to $349.5 million from $287.5 million.
Seventeen out of the cement companies posted profit growth in the nine-month period, while ten others posted profit decline.
( written by Mohamed Abu Meleeh; translated by Sayed Abdel Rahman)