Oman Cement 2014 profit declines on weaker sales, clinker imports

Oman Cement reported a 12.8 per cent decline in net profit on account of weaker sales, lower clinker production and higher volumes of imported clinker, the company said on Monday.

Clinker imports were brought in by the company during the year due to one of its kilns being closed temporarily for capacity enhancement.

Oman Cement sold 2.078Mt of cement through 2014, down 1.1 per cent compared to 2.1Mt in the same period of last year. In revenue terms, sales were down 2.05 per cent YoY to OMR51.35m (US$133.4m).

“Market demand for cement in Oman remains good due to continued emphasis on infrastructure development. With the company's well-structured pricing policy, we hope that in spite of stiff competition with other cement manufacturers, particularly from neighbouring countries, the company will continue to do well to retain its market share,” the report said.

The company added that the government’s decision to double the price the natural gas as of 1 January 2015 is expected to have a significant impact on its performance going forward.  “Similarly restrictions on carrying capacity for road transport of materials will also increase the cost of operations. However, we are committed to meet the challenge by directing our efforts towards better cost management,” it added.

Additional capacity
The construction of a 150tph cement mill is in progress and is expected to be completed during the final quarter of this year, the company said.

It added that it would consider setting up a new cement plant through a joint venture after detailed studies.