Tabuk and Al Jouf net profit dragged down by lower demand

Saudi-based producers Tabuk Cement and Al Jouf Cement have reported a decline in second quarter net profit due in part to lower demand.

Tabuk Cement, which operates a 1.2Mta plant in Duba, said net profit fell by 93.84 per cent YoY to  SAR1.3m (US$346,619). Quarter-on-quarter, net profits fell 85.06 per cent. The smallest of Saudi’s established grey cement producers, Tabuk Cement attributed the decrease to lower demand and prices. In the first half of 2017, net profits declined 76.42 per cent to reach SAR10m, compared to SAR42.4m in 1H16.

Meanwhile, Al Jouf Cement announced a 53.7 per cent YoY decrease in 2Q17 net profit to SAR10.52m. Quarter-on-quarter, profits tumbled 35.4 per cent. The company, which has a 3Mta integrated plant 30km to the south of Turaif, said the decline was due to a drop in sales volumes and a decrease in other revenues. Sales fell by 31.4 per cent to SAR62.4m, from SAR90.8m in the year-ago period.

In the first half of 2017 Al Jouf's net profit contracted by 43.5 per cent to SAR26.81m. Sales slid 21.5 per cent to SAR142.6m in 1H17, from SAR 181.6m in the corresponding period a year ago.

Over the past few weeks, Northern Region Cement, Eastern Province Cement, Yanbu Cement Co, Yamama Cement Co, Hail Cement Co and Qassim Cement Co have all reported declines in net profits, with the Saudi cement industry having been affected by falling cement prices and lower demand.