Raysut full-year profit dips, Oman

Raysut Cement reported full-year net profit of OMR27.42m (US$71.22m), 0.4 per cent lower than the OMR27.52m posted in the previous year.

Revenue rose 1.1 per cent to OMR94,29m from OMR93.29m, according to a company filing with the Muscat Securities Market on Thursday.

A research note by Gulf Baader Capital Markets (GBCM) said the company’s revenue was in line with estimates but earnings was below its forecast of OMR28.8m.

According to GBCM, group sales volumes came in at 3.8Mt but question marks hang over the oil price effect. "Despite the drop in oil prices the government assurance on continuing with its massive spending towards infrastructure projects is likely to keep domestic demand for cement intact. On the flip side concern remains on the prolonged trend of lower oil prices due to which the construction market in Oman may witness delay in the execution of few projects or cancellation of non-priority projects which in turn may result in higher inventory or lower utilisation,"GBCM said.

Moreover, the research house said that the current political upheaval in Yemen combined with a cut in international aid is likely to weigh on the company's export sales. 'We believe this may weigh on first quarter 2015 earnings. In addition the recent hike in gas prices will have a significant impact to an extent of OMR4.5m to the earnings in full-year 2015 as disclosed by the company."