Yanbu Cement full-year net profit rises 36% YoY

Saudi cement producer Yanbu Cement Co (YCC) reported a surge in full-year net profit thanks to increased demand and a new production line as top capacity players benefit from the country's boom period.

The company's net profit rose 36 per cent YoY in 2012 to SAR720.5m (US$192.1m). Earnings per share (EPS) stood at SAR 6.86, up from SAR 5.04.

Local cement producers have been riding high on government projects which puts emphasis on improving education, social services and basic infrastructure. Cement dispatches in 2012 at 53.8Mt compared to 48.5Mt in 2011, reflecting growth of 10 per cent, according to figures by Global Investment House (GIH).

For 2013, Saudi Arabia has budgeted revenues of SAR829bn (US$221bn) and an expenditure of SAR820bn – the largest in the country's history. The government has  allocated SAR36bn for municipality services for 2013, up 23 per cent over that of 2012. Projects include construction of bridges, inter-city roads, rain drainage control systems and public transport in Riyadh and Makkah.

Along with these investments,  SAR65bn has been earmarked for infrastructure and transportation sector. This includes SAR30bn related to the development of 3700km of roads, modernisation of existing ports, construction of regional and international airports and berths, plus infrastructure projects in Yanbu, Jubail and Ras Al-Khair. Custodian of the Two Holy Mosques King Abdullah has ordered the construction of 500,000 homes in different over at a cost of SAR250bn over five years.

As such, GIH expects cement demand in the kingdom to touch 58Mt in 2013.