Riyadh - Mubasher: Al Rajhi Capital maintained their neutral rating with unchanged target price of SAR 60 per share for Qassim Cement, according to a recent report.

The research firm said that Qassim Cement reported a weak set of numbers for the fourth  quarter of 2016, as the company’s net profit came in at SAR 88.8 million, with a 37% year-on-year decline, and a 26% quarter-on-quarter increase, below Al Rajhi Capital’s estimates of SAR 101.5 million as well as the consensus estimate of SAR 96 million.

Earnings declined mainly due to sharp drop in average realized price per ton to SAR 193 in Q4-16, compared to SAR 225 in Q4-15 and SAR 212 in Q3-16.

Sales volume also decreased 19.2% during the quarter, which in turn was due to high competition amid weak demand situation in the kingdom, while gross and operating profit margins dropped to 51.8% and 46.7%, respectively, from 59.6% and 57.1% in the same period last year.

The trend of falling sales volume and profitability has been witnessed across the cement sector as the Kingdom’s construction activities remain under pressure, the report added.