GCC's 2011 revenues up 14.2% YoY

Revenues of GCC cement companies increased to US$4.6bn in 2011 from US$4bn in the previous year, a 14.2 per cent rise, a report by Global Investment House (GIH) said. Net profits, however, increased just two per cent from US$1.44bn in 2010 to US$1.477bn in 2011. In terms of performance by country, Saudi Arabia, Oman, UAE and Kuwait reported an increase sales during  2011, while Qatar saw a decline, the report said.

The UAE which witnessed decline in sales revenue since 2008, enjoyed a 5.9 per cent increase last year to reach US$940m. However, gross margin were at its all-time low of 4.2 percent. Also, net profit were negative for the first time since Global Research started to compile UAE cement data.

Oman saw a 12.8 per cent increase in sales revenue reaching US$342.3m, the second highest revenue in the Oman cement history but net profits were down 39.4 per cent YoY.

Kuwait reported a 5.4 per cent increase in revenues to reach US$66.9m and posted a 47.1 per cent decrease in net profits as compared to 2010. Saudi Arabia posted a strong 22.6 per cent increase in sales revenue and a 25.2 per cent increase in net profits. The construction industry in the Saudi Arabia is estimated to grow from the US$36.5bn contract awards value in 2011 to close to US$43.8bn by 2013, the report said. Qatar was the only GCC country reporting declining sales and profits.

Cement prices in the GCC averaged around US$64.9/t in 2011,  compared to US$68.3/t enjoyed in 2010, a 4.9 per cent decrease mainly due to decline in Kuwait, UAE and Oman where companies slashed prices to win contracts. On the other hand Saudi Arabia and Qatar witnessed slight increase in cement prices. On a CAGR basis during the period 2006-2011 average cement prices in GCC decreased 0.8 per cent. Oman marked the largest decline of prices by 19.3 percent to reach US$64.1/t in 2011.