Saudi Arabia: Eastern Province and Tabuk Cement see fall in 3Q16 profits

Eastern Province Cement Co and Tabuk Cement are the latest Saudi cement producers to post a fall in third-quarter profits amid lower sales and higher production costs.

Eastern Province Cement Co posted a 35.8 per cent YoY decrease in net profits from SAR67m in 3Q15 to SAR43m in 3Q16. In the first nine months of 2016 the cement producer reported net profits of SAR180m, representing a 26.2 per cent fall when compared with the SAR244m net profit in 9M15. The downward trend in profits has been attributed to lower sales as domestic demand has fallen. In addition, production costs have increased.

Tabuk Cement saw its net profit for 3Q16 fall by 14.1 per cent YoY to SAR7.9m while operating profit declined eight per cent YoY to SAR8.1m in the three-month period. For the first nine months of 2016, Tabuk net profit fell 25.4 per cent to SAR51.3m. The cement company attributed the year-on-year profit fall in Q3-16 to a decline in average selling prices and higher cost of sales added to the impact of increased energy prices and lower other revenues.