Saudi Cement 3Q14 profits better than expected

Saudi Cement posted better than expected 3Q14 financial results, beating consensus estimates, according to Al-Rajhi Capital. The cement producer’s net profit grew marginally to SAR232m (US$61.8m) by +1.3 per cent YoY. The Saudi cement sector is gradually recovering from the effects of a labour crisis, with total local sales growing 5.4 per cent YoY in September.

Saudi Cement sold 1.64Mt of cement in the domestic market, down -8.5 per cent YoY, in line with Al-Rajhi’s expectations.

However, Saudi Cement is losing market share as its local sales declined 16.5 per cent YoY in the first nine months of 2014, while the overall sector saw a decline of only 4.8 per cent over the same period.
For now, the research firm is reiterating its ‘Neutral’ rating on Saudi Cement, with a price target of SAR127.1/share.