Oman Cement Co (OCC) reported a 47 per cent decline in net profit to OMR3.70m (US$9.61m) for the first three months of the year as a planned kiln shut down for expansion works affects production and lowers profitability.
OCC, Oman's second-largest cement producer, has embarked upon a capacity upgrade project for one of its kilns which, upon completion will increase output by 2700tpd.
“Since the project is in the final stage and nearing completion, and as a part of planned project activity, this kiln was shut down for the entire period of the first quarter. This adversely affected our production and sales, which is lower compared with our performance in the first quarter of 2013, and the impact is reflected in lower profits for the current period,” said Dr Abdullah Abbas Ahmed, chairman of Oman Cement, in the directors' report.
Cement sales declined 17 per cent to 521,667t during 1Q14, against 628,553t during the corresponding period of 2013.
In value terms, sales for the first three months of 2014 were at OMR13.04m, as against OMR15.65m during the corresponding period of the previous year, down by 16.7 per cent.
Dr Ahmed added: “We are confident that with the commencement of additional production, planned towards the end of the second quarter, with this upgraded kiln, the company will be able to improve its performance.”
The company has also finalised arrangements with a leading bank in Oman to finance its project for the installation of a new 150tph cement mill and the supportive infrastructure of cement silos.
