Raysut Cement's production rises 14% in FY18

Raysut Cement Co of Oman has released consolidated financial statements for the year ended 31 December 2018, reporting that it produced 3.398Mt of clinker and 3.326Mt of cement against 2.967Mt of clinker and 2.913Mt of cement, respectively in 2017.  The overall production of clinker is higher YoY by 14.5 per cent and cement by 14.2 per cent, respectively.
 
According to the report, out of total production, the parent company produced 2.051Mt of clinker and 2.11Mt of cement at its Salalah plant in 2018 when compared with 1.677Mt of clinker and 1.739Mt of cement in 2017. Overall there is an increase in clinker production by 22.3 per cent and cement by 21.3 per cent as compared to 2017.
 
In the UAE the company's Pioneer Cement subsidiary produced 1.347Mt of clinker and 1.216Mt of cement  during 2018, against 1.29Mt of clinker and 1.174Mt cement, respectively in 2017. Clinker production advanced by 4.4 per cent and cement by 3.6 per cent when compared to 2017.
 
As a whole, the group has sold 3.332Mt of cement during 2018 against 2.922Mt of cement in 2017, representing a 14 per cent YoY increase.  The increase in volume is attributable partly to a change in product mix and partly to the change in pricing policy, says Raysut Cement.
 
Out of the total sales, the parent company sold 2.263Mt of cement in 2018 against 1.819Mt of cement in the previous year, an advance of 24.4 per cent.  Further, there is a sale of 0.430Mt of clinker, of which 0.378Mt was exported. In addition to the domestic market, the parent company's main export markets are Yemen, Qatar and east Africa.

Pioneer Cement sold 1.215Mt of cement in 2018, against 1.163Mt in 2017, an increase by 4.5 per cent. Further, there 0.591Mt of clinker was sold. Pioneer Cement's main markets are UAE, Bangladesh and Oman.
 
In 2018 the group has earned a revenue of OMR90.98m (US$236.6m) against OMR71.87M in 2017, an increase by 26.6 per cent.
 
Group profit before tax stood at OMR1.04m as against OMR8.03m in the last year, a decrease of 87.05 per cent due to the number of reasons, including the lower price realisation per tonne of cement (13.4 per cent drop for the parent company and 7.6 per cent fall for Pioneer Cement) although the volume of sale quantity increased during the year. Other factors were higher raw materials costs, mainly due to change in mix design, and higher consumption of packing materials, because of higher bagged cement sales and an increase in procurement price of packing material. In addition, shipping costs to terminals increased due to the hiring of additional vessels for the higher sales volume of cement to fill the gap of cement demand in Oman, since the company's own vessels required assistance to cope with the higher volumes.

Other factory overheads also rose, due to maintenance activities carried out during current year, and hiring of services from third parties. Increased general and administrative expenses contributed by selling commission paid on new markets developed, travel and employee-related expenses.
 
Group profit after tax decreased to OMR0.34m from OMR5.81m, a fall of 94.1 per cent during the year.
 
Group profit after tax of the parent company stood at OMR3.65m against OMR6.27m a fall of 41.8 per cent during the year.