Saudi Arabia based Arabian Cement has registered a net loss of SAR50.9mn for the second quarter of 2018, owing to the poor performance of its Jordanian unit (Qatrana Cement).
Also with the tough competition in the Western region market getting stronger, the Saudi cement firm saw its average realised price plunging to SAR130 per tonne, as the company tries to retain selling prices from further decreases.
But that came on the account of its market share as the net profit decreased significantly to 5.5% in Q2 2018 as compared to 8.4% in Q2 2017.
According to experts, Arabian Cements miss was mainly due to its Jordanian operations (Qatrana Cement), which recorded a higher than estimated net loss of SAR52.2mn in Q2 2018. The company held an inventory of 1.34mn tons by the end of June, representing 42.2% of the last 12 months sales.
On the sales side, Arabian Cement sold 533,000 tons in Q2 2018, down 34% y-o-y and 48.5% q-o-q, they stated.
Going forward, the experts said the selling prices fluctuations could continue in the coming quarters. “However, we expect that selling prices would stabilise in the following years given the mega construction projects in the western region and the companys comparatively low inventory level.”