Analysis of Umm Al-Qura Cement’s average selling price/ton, margins, market share in Q2 2022

Logo of Umm Al-Qura Cement Co. 

Sales of Umm Al-Qura Cement Co. declined nearly 7% to SAR 59.48 million in the second quarter of 2022 from SAR 63.90 million in the year-earlier period.

Likewise, gross profit margins fell to more than a three-year low at 29% in Q2 2022, compared to 44% and 35% in Q2 2021 and Q1 2022, respectively.

The company's average selling prices decreased by 14.5% YoY to SAR 161.2/ton in Q2 2022 from SAR 188.5/ton.

Meanwhile, the average production cost rose by 7.1% to SAR 124.6/ton in Q2 2022, compared to SAR 116.4/ton in Q2 2021.

Umm Al-Qura Cement’s market share grew to 3.3% of the sector's total sales in Q2 2022, compared to 2.9% in Q2 2021. This was due to an 8.8% increase in sales volumes.

The company's stockpile amounted to 2.55 million tons by the end of June 2022, accounting for 7.2% of the sector's total clinker inventory.

Umm Al-Qura Cement’s monthly average sales stood at 124,000 tons. Accordingly, the company needs around 21 months to offload its stockpiles.

The company reported a net profit of SAR 8.3 million in Q2 2022, a 54.8% decrease from SAR 18.41 million in the year-ago period. The cement producer cited lower sales volume and reduced prices for the profit decline, in addition to a 16.7% increase in production cost, as well as higher selling and marketing expenses.