City Cement CEO says Q4 profit would jump 81% excluding one-offs

City Cement Co.’s adjusted net profit would have surged 81% year-on-year (YoY) in Q4 2019, excluding one-off profits, CEO Majed Al Osailan told Argaam in an exclusive interview.

The Q4 2018 figures included one-off profits of SAR 48 million, as the cement producer had reached a settlement agreement with Sinoma International Co. on the second production line project.

In Q4 2019, City Cement’s sales volume grew by 37% YoY amid a continuous correction in average selling prices, based on supply-demand mechanism, and a recovery in average market prices.

The company’s clinker stock stood at 1.1 million tons as of March 15, 2020.

“The planned capital cut will contribute to improving the company’s performance and profitability,” Al Osailan said, adding that City Cement has appointed the legal and financial advisors.

It will also issue a circular to its shareholders on the process details, after obtaining the required regulatory approval, he noted.

Commenting on the impact of lower oil prices and the spread of coronavirus on the cement industry, Al Osailan said, “those factors have loomed over global economy, however, we’re confident of Saudi Arabia’s solid economy.”

All adopted precautionary measures gard to control the pandemic signals that Saudi Arabia will be able to contain the coronavirus as soon as possible, Al Osailan concluded.

The company’s net profit after Zakat and tax climbed 61% year-on-year (YoY) to SAR 181 million for the fiscal year 2019, Argaam reported.