RIYADH: Saudi Cement has reported a 12.5 percent drop in its first-quarter net profit, hurt by a decrease in sales and an increase in energy costs. One of the kingdom’s largest cement firms by market value made a net profit in the three months to March 31 of SR265 million ($70.7 million), down from SR303 million in the corresponding period of 2015, according to a bourse filing.
The average forecast of five analysts polled by Reuters was for a quarterly net profit of SR269.9 million. It didn’t elaborate on the reasons for its earnings performance beyond the reference to sales and energy prices.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later. Construction-related firms have been put under pressure though by a slowdown in the sector, caused by cutbacks in state spending due to lower oil prices.
Saudi Cement also expects the fuel and electricity price hikes announced in the 2016 government budget to increase its production costs by SR68 million riyals this year. However, Saudi Arabia has lifted a ban on exporting cement, the local Al Riyadh newspaper reported on Apr. 12; a move that would allow companies to export excess supply.
