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Gulf cement firms’ profits fall on heated competition in 9M

Gulf cement firms’ profits fall on heated competition in 9M

By: Mahmoud Gamal

Mubasher: Twenty-four cement companies across the GCC have disclosed their financial results for the first nine months of 2018, logging $251 million in combined profits, a sharp fall of 59.8% year-on-year from $625.2 million, data compiled by Mubasher showed.

The main reason for this drop was, as many companies have said, was the ongoing strong competition, which in turn resulted in lower sales, weak demand, and higher general and administrative expenses.

 

Country-wise

By country, Saudi cement firms had the lion’s share of the group, accounting for 36.2% of total profits posted between January and September 2018. Collectively they achieved $90.47 million, down 77.5% from $401.2 million in the year-ago period, statistics by Mubasher showed.

Qatari cement firms came in second, contributing 23.9%, after logging $59.59 million in profits, down 9.88% from $66.13 million in the nine months to September 2017.

Kuwaiti cement companies, representing 21.2% of firms’ profits, posted $52.82 million in the period, a decrease of 21.04% year-on-year from $66.9 million, the data showed.

Meanwhile, UAE firms, whose profits made up 10.2% of the group, reported $25.4 million in profits during the nine-month period, down 44.3% from $45.5 million in the same period of 2017.

In Oman, cement companies achieved $21.33 million in profits between January and September 2018, representing 8.5% of the group, and registering a 43% year-on-year drop from $37.27 million.

 

Company-wise

Saudi Cement topped Gulf peers with $73.44 million in profits in the first nine months of 2018, a decrease of 20.3% from $92.18 million a year ago, while Qatar National Cement came in second with $59.59 million in profits, down 9.9% from $66.13 million.

Only one cement company achieved a profit growth during the nine-month period, namely Abu Dhabi-listed RAK Cement, whose profits surged 3,289% to $1.83 million from $54,000 in the prior-year period.

Sixteen companies registered profit falls in the January-to-September 2018 period, led by Gulf Cement, whose profits tumbled 92% year-on-year to $435,000, while Saudi-listed Yanbu Cement’s profits retreated 74.4% to $15.17 million from $59.34 million, the data indicated.

Several firms, across the GCC, incurred losses during the period, led by Saudi Arabia’s Tabuk Cement, whose losses widened by 2,881% year-on-year to $17.71 million, from $594,000.

Najran Cement’s losses also jumped 552.2% year-on-year to $17.48 million, according to its bourse statement.

 

Turning to losses

Five Gulf companies turned to losses in the nine months to September, with Saudi’s Yamamah Cement suffering $15.66 million in losses versus $24.55 million in profits.

 

Translated by: Nada Adel Sobhi