Saudi Cement has registered revenue of SR348 million ($92.6 million) in the second quarter of 2021, a y-o-y growth of 17%, higher than estimate of SR324 million by 7.6%, said Al Rajhi Capital, a top provider of financial services in Saudi Arabia.

Growth in sales was supported by a 21.5% y-o-y growth in volume. Cement sales volume for 2Q21 came in at 1.417 million tons, and was higher than our estimate of 1.337 million tons. Gross profit and operating income increased by 12.1% y-o-y and 10.9% y-o-y respectively and was aided by improvement in revenue.

Cement volume in the industry grew by 21.3% y-o-y, while Eastern region volume increased by 29.2% y-o-y, at the back of lower base in Q2 2020, due to Covid restrictions. However, Saudi Cement underperformed the regional average, though its performance was in line with the industry average.

“Going forward, we expect cement volumes to come under pressure in 3Q21 at the back of lower construction activity in the Kingdom, due to uncertainties relating to the new building permit norms and shortage in labour,” said Al Rajhi Capital in a report.

“However, we expect the situation to improve by 4Q21. We reduce our target price to SR66/share from the earlier target price of SR69/share, but maintain our rating at ‘Neutral’.” – TradeArabia News Service