Arabian Cement’s Q3 earnings backed by improved local selling prices: CEO

Arabian Cement CEO Badr Johar

Arabian Cement Co. reported higher earnings in Q3 2022, primarily fueled by improved selling prices locally and stronger performance of associates, as well as subsidiaries, Chief Executive Officer Badr Johar told Argaam in a phone call.

The company’s sales dropped slightly in local and Jordanian markets in Q3 2022 compared to the prior year. In addition, exports of clinker plummeted by 44% year-on-year (YoY) during the three-month period, due to weaker export prices.

Johar indicated that the cement producer is constantly assessing prices in the export markets to determine the volumes of exports on a semi-annual basis.

Arabian Cement has clinker stockpiles of 1.9 million tons by the end of Q3 2022, while clinker exports reached 734,000 tons in 2022, compared to 1,325 million tons in the year-earlier period.

The Public Investment Fund’s (PIF) projects in the region are expected to boost demand, especially amid a slower pace in some residential projects, on a decline in mortgage loans and the hike in the interest rates, the CEO said.

Johar expected prices to rebound gradually on the significantly higher cost of production inputs. He also indicated that the cement producer is debt free, but the subsidiary owes some financial obligations to the whole group.

Speaking on the cement mills project, Johar stated that the company currently plans to appoint a third-party subcontractor to finalize the project, and is already evaluating some bids. He also pointed out that the remaining part of the project is very important since it is related to operating equipment and ensuring quality and readiness.

The new project will boost the milling capacity by 10,000 tons of cement per day, when it operates at its maximum capacity, Johar indicated, adding that the project will be finalized in four-six months after the new company starts work.

Arabian Cement reported a net profit after Zakat and tax of SAR 145.9 million for the first nine months of 2022, a 6% jump, compared to SAR 138.2 million in the year-earlier period. Q3 2022 net profit after Zakat and tax amounted to SAR 59 million, up by 56% from SAR 37.73 million, Argaam reported.