Saudi Cement Q1 net profit falls 13%

Byszheng

Updated Tue, 19 Apr 2016 10:15:47 GMT

Saudi Cement reported a 12.5 percent drop in first-quarter net profit on Monday, 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 Mar. 31 of 265 million riyals ($70.7 million), down from 303 million riyals 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 269.9 million riyals.

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 68 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.