Northern Cement 2023 earnings fall 50% to SAR 56.4M; Q4 loss at SAR 7.8M

21/03/2024 Argaam Exclusive

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Northern Region Cement Co.’s 2023 net profit dropped 50% to SAR 56.4 million, compared to SAR 112.5 million in 2022.

Financials (M)

Item	2022	2023	Change‬
Revenues	617.96	689.55	11.6 %
Gross Income	224.03	201.37	(10.1 %)
Operating Income	140.18	127.32	(9.2 %)
Net Income	112.02	56.26	(49.8 %)
Average Shares	180.00	180.00	-
EPS (Riyals)	0.62	0.31	(49.8 %)

The profit decline was due to the settlement with the Zakat, Tax and Customs Authority for 2014 to 2019. This is in addition to the significant increase in financing costs due to higher global interest rates. The company also cited lower sales prices in 2023, compared to the previous year.

Revenues also increased year-on-year (YoY) in 2023 due to the rise in sales volumes, despite lower average prices on an annual basis.

The cement producer incurred a net loss of SAR 7.8 million in Q4 2023, against a net profit of SAR 37.02 million a year before.

Compared to the previous quarter, Northern Cement swung to losses from a profit of SAR 23.26 million.

Current Quarter Comparison (M)

Compared With The

Item	Q4 2022	Q4 2023	Change‬
Revenues	185.02	175.32	(5.2 %)
Gross Income	76.93	61.75	(19.7 %)
Operating Income	44.76	38.47	(14.1 %)
Net Income	36.59	(7.93)	(121.7 %)
Average Shares	180.00	180.00	-
EPS (Riyals)	0.20	(0.04)	(121.7 %)

Item	Q3 2023	Q4 2023	Change‬
Revenues	175.20	175.32	0.1 %
Gross Income	55.53	61.75	11.2 %
Operating Income	35.96	38.47	7.0 %
Net Income	23.26	(7.93)	(134.1 %)
Average Shares	180.00	180.00	-
EPS (Riyals)	0.13	(0.04)	(134.1 %)

Total shareholders’ equity, after minority interest, rose to SAR 22.40 billion as of Dec. 31, 2023, from SAR 22.28 billion a year earlier.

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Financial results (Million)

Period	Revenues	Change	Gross Income	Change	Net Income	Change	EPS(Riyal)
Q1 2014	308.53	69.7 %	116.34	104.5 %	60.76	42.0 %	0.34
Q2 2014	229.75	(10.2 %)	88.24	(9.7 %)	62.09	(31.2 %)	0.34
Q3 2014	203.39	21.5 %	78.10	31.4 %	51.35	2.6 %	0.29
Q4 2014	257.47	4.1 %	110.72	(21.1 %)	25.81	(50.0 %)	0.14
2014	999.14	17.2 %	393.40	11.0 %	200.01	(14.7 %)	1.11
Q1 2015	253.13	(18.0 %)	100.51	(13.6 %)	50.63	(16.7 %)	0.28
Q2 2015	324.34	41.2 %	133.49	51.3 %	64.03	3.1 %	0.36
Q3 2015	274.92	35.2 %	107.83	38.1 %	52.64	2.5 %	0.29
Q4 2015	277.41	7.7 %	89.57	(19.1 %)	39.62	53.5 %	0.22
2015	1,129.80	13.1 %	431.39	9.7 %	206.91	3.4 %	1.15
Q1 2016	231.14	(8.7 %)	76.07	(24.3 %)	42.91	(15.3 %)	0.24
Q2 2016	251.67	(22.4 %)	95.05	(28.8 %)	48.66	(24.0 %)	0.27
Q3 2016	141.39	(48.6 %)	52.91	(50.9 %)	30.09	(42.8 %)	0.17
Q4 2016	126.62	(54.4 %)	98.31	9.8 %	30.60	(22.8 %)	0.17
2016	750.82	(33.5 %)	322.34	(25.3 %)	152.26	(26.4 %)	0.85
Q1 2017	124.14	(46.3 %)	45.50	(40.2 %)	16.33	(62.0 %)	0.09
Q2 2017	110.31	(56.2 %)	34.54	(63.7 %)	8.26	(83.0 %)	0.05
Q3 2017	104.85	(25.8 %)	46.66	(11.8 %)	12.51	(58.4 %)	0.07
Q4 2017	123.37	(2.6 %)	46.77	(52.4 %)	15.27	(50.1 %)	0.08
2017	462.67	(38.4 %)	173.47	(46.2 %)	52.51	(65.5 %)	0.29
Q1 2018	113.14	(8.9 %)	23.92	(47.4 %)	1.45	(91.1 %)	0.01
Q2 2018	119.63	8.4 %	30.70	(11.1 %)	(6.62)	(180.1 %)	(0.04)
Q3 2018	99.09	(5.5 %)	39.45	(15.4 %)	5.00	(60.1 %)	0.03
Q4 2018	53.08	(57.0 %)	45.91	(1.8 %)	13.03	(14.7 %)	0.07
2018	392.55	(15.2 %)	147.60	(14.9 %)	12.85	(75.5 %)	0.07
Q1 2019	124.32	9.9 %	51.12	113.7 %	15.42	966.3 %	0.09
Q2 2019	144.25	20.6 %	49.12	60.0 %	13.97	311.0 %	0.08
Q3 2019	194.69	96.5 %	61.09	54.8 %	26.08	422.1 %	0.14
Q4 2019	210.12	295.9 %	55.00	19.8 %	36.80	182.4 %	0.20
2019	673.37	71.5 %	216.32	46.6 %	92.27	618.1 %	0.51
Q1 2020	180.17	44.9 %	53.88	5.4 %	27.43	77.9 %	0.15
Q2 2020	132.04	(8.5 %)	39.91	(18.8 %)	13.93	(0.3 %)	0.08
Q3 2020	172.90	(11.2 %)	48.71	(20.3 %)	21.52	(17.5 %)	0.12
Q4 2020	166.38	(20.8 %)	53.63	(2.5 %)	44.62	21.3 %	0.25
2020	651.48	(3.3 %)	196.13	(9.3 %)	107.50	16.5 %	0.60
Q1 2021	161.87	(10.2 %)	53.87	0.0 %	31.66	15.4 %	0.18
Q2 2021	145.32	10.1 %	42.29	6.0 %	20.91	50.1 %	0.12
Q3 2021	128.10	(25.9 %)	42.02	(13.7 %)	18.36	(14.7 %)	0.10
Q4 2021	126.62	(23.9 %)	61.68	15.0 %	35.13	(21.3 %)	0.20
2021	561.91	(13.7 %)	199.85	1.9 %	106.06	(1.3 %)	0.59
Q1 2022	133.26	(17.7 %)	46.47	(13.7 %)	23.24	(26.6 %)	0.13
Q2 2022	133.42	(8.2 %)	49.54	17.1 %	24.64	17.8 %	0.14
Q3 2022	166.26	29.8 %	62.00	47.6 %	27.56	50.1 %	0.15
Q4 2022	185.02	46.1 %	76.93	24.7 %	36.59	4.2 %	0.20
2022	617.96	10.0 %	224.03	12.1 %	112.02	5.6 %	0.62
Q1 2023	181.09	35.9 %	48.14	3.6 %	21.40	(7.9 %)	0.12
Q2 2023	157.94	18.4 %	40.14	(19.0 %)	19.52	(20.7 %)	0.11
Q3 2023	175.20	5.4 %	55.53	(10.4 %)	23.26	(15.6 %)	0.13
Q4 2023	175.32	(5.2 %)	61.75	(19.7 %)	(7.93)	(121.7 %)	(0.04)
2023	689.55	11.6 %	201.37	(10.1 %)	56.26	(49.8 %)	0.31

Period	Revenues	Change	Gross Income	Change	Net Income	Change	EPS(Riyal)
2014	999.14	17.2 %	393.40	11.0 %	200.01	(14.7 %)	1.11
2015	1,129.80	13.1 %	431.39	9.7 %	206.91	3.4 %	1.15
2016	750.82	(33.5 %)	322.34	(25.3 %)	152.26	(26.4 %)	0.85
2017	462.67	(38.4 %)	173.47	(46.2 %)	52.51	(65.5 %)	0.29
2018	392.55	(15.2 %)	147.60	(14.9 %)	12.85	(75.5 %)	0.07
2019	673.37	71.5 %	216.32	46.6 %	92.27	618.1 %	0.51
2020	651.48	(3.3 %)	196.13	(9.3 %)	107.50	16.5 %	0.60
2021	561.91	(13.7 %)	199.85	1.9 %	106.06	(1.3 %)	0.59
2022	617.96	10.0 %	224.03	12.1 %	112.02	5.6 %	0.62
2023	689.55	11.6 %	201.37	(10.1 %)	56.26	(49.8 %)	0.31

Profitability

Period	Gross Margin	OIBDA Margin	Net Margin Before Unusual Items
Q1 2014	42.27 %	37.12 %	25.80 %
Q2 2014	42.44 %	36.65 %	23.55 %
Q3 2014	42.78 %	36.24 %	22.83 %
Q4 2014	39.37 %	37.45 %	23.02 %
2014	39.37 %	37.45 %	23.02 %
Q1 2015	40.01 %	39.04 %	23.30 %
Q2 2015	40.72 %	36.61 %	22.04 %
Q3 2015	40.77 %	35.37 %	20.73 %
Q4 2015	38.18 %	32.38 %	18.99 %
2015	38.18 %	32.38 %	18.99 %
Q1 2016	36.73 %	31.96 %	18.67 %
Q2 2016	35.60 %	31.16 %	17.82 %
Q3 2016	34.78 %	33.94 %	17.96 %
Q4 2016	42.93 %	37.47 %	19.83 %
2016	42.93 %	37.47 %	19.83 %
Q1 2017	45.32 %	39.39 %	18.99 %
Q2 2017	46.02 %	43.10 %	16.30 %
Q3 2017	48.29 %	33.57 %	13.80 %
Q4 2017	37.49 %	36.23 %	11.32 %
2017	37.49 %	36.23 %	11.35 %
Q1 2018	33.63 %	32.16 %	7.03 %
Q2 2018	32.12 %	28.22 %	3.66 %
Q3 2018	30.94 %	30.79 %	2.05 %
Q4 2018	36.36 %	31.27 %	1.84 %
2018	37.60 %	30.66 %	1.81 %
Q1 2019	42.20 %	35.40 %	6.77 %
Q2 2019	44.11 %	38.83 %	11.27 %
Q3 2019	40.14 %	36.52 %	13.27 %
Q4 2019	32.13 %	29.77 %	11.21 %
2019	32.13 %	29.77 %	11.21 %
Q1 2020	30.04 %	27.88 %	10.84 %
Q2 2020	29.27 %	27.80 %	11.02 %
Q3 2020	28.41 %	24.72 %	10.71 %
Q4 2020	30.10 %	27.48 %	15.21 %
2020	30.10 %	30.24 %	15.21 %
Q1 2021	30.97 %	29.15 %	17.65 %
Q2 2021	30.71 %	29.29 %	18.36 %
Q3 2021	31.88 %	33.16 %	19.21 %
Q4 2021	35.57 %	35.16 %	17.50 %
2021	35.57 %	35.16 %	17.50 %
Q1 2022	36.09 %	35.94 %	16.86 %
Q2 2022	38.30 %	37.68 %	17.96 %
Q3 2022	39.26 %	37.04 %	18.38 %
Q4 2022	38.02 %	34.50 %	18.13 %
2022	36.25 %	34.50 %	18.13 %
Q1 2023	35.54 %	32.31 %	16.55 %
Q2 2023	32.91 %	30.07 %	15.22 %
Q3 2023	31.57 %	30.19 %	14.41 %
Q4 2023	29.81 %	29.81 %	8.16 %
2023	29.20 %	29.21 %	8.16 %

Period	Gross Margin	OIBDA Margin	Net Margin Before Unusual Items
2014	39.37 %	37.45 %	23.02 %
2015	38.18 %	32.38 %	18.99 %
2016	42.93 %	37.47 %	19.83 %
2017	37.49 %	36.23 %	11.35 %
2018	37.60 %	30.66 %	1.81 %
2019	32.13 %	29.77 %	11.21 %
2020	30.10 %	30.24 %	15.21 %
2021	35.57 %	35.16 %	17.50 %
2022	36.25 %	34.50 %	18.13 %
2023	29.20 %	29.21 %	8.16 %

Period	Gross Margin	OIBDA Margin	Net Margin Before Unusual Items
Q1 2014	37.71 %	30.21 %	19.70 %
Q2 2014	38.41 %	41.03 %	27.03 %
Q3 2014	38.40 %	42.53 %	25.24 %
Q4 2014	43.00 %	38.92 %	21.68 %
Q1 2015	39.71 %	34.54 %	20.00 %
Q2 2015	41.16 %	32.69 %	21.90 %
Q3 2015	39.22 %	35.99 %	19.15 %
Q4 2015	32.29 %	26.47 %	14.53 %
Q1 2016	32.91 %	32.75 %	18.56 %
Q2 2016	37.77 %	29.58 %	19.33 %
Q3 2016	37.42 %	58.32 %	21.28 %
Q4 2016	77.64 %	38.49 %	21.48 %
Q1 2017	36.65 %	38.64 %	13.15 %
Q2 2017	31.31 %	33.90 %	7.49 %
Q3 2017	44.50 %	21.27 %	11.93 %
Q4 2017	37.91 %	48.60 %	12.38 %
Q1 2018	21.14 %	22.62 %	(3.81 %)
Q2 2018	25.66 %	18.61 %	(5.53 %)
Q3 2018	39.81 %	32.65 %	5.04 %
Q4 2018	86.50 %	75.65 %	24.55 %
Q1 2019	41.12 %	36.57 %	12.40 %
Q2 2019	34.05 %	31.47 %	9.68 %
Q3 2019	31.38 %	29.57 %	13.40 %
Q4 2019	26.17 %	24.77 %	9.51 %
Q1 2020	29.90 %	26.80 %	10.56 %
Q2 2020	30.22 %	31.39 %	10.55 %
Q3 2020	28.17 %	17.41 %	12.44 %
Q4 2020	32.24 %	35.59 %	26.82 %
Q1 2021	33.28 %	33.23 %	19.56 %
Q2 2021	29.10 %	31.82 %	14.39 %
Q3 2021	32.80 %	31.46 %	14.33 %
Q4 2021	48.71 %	45.23 %	21.63 %
Q1 2022	34.87 %	35.93 %	17.44 %
Q2 2022	37.13 %	38.24 %	18.46 %
Q3 2022	37.29 %	30.74 %	16.58 %
Q4 2022	41.58 %	34.15 %	19.78 %
Q1 2023	26.58 %	27.51 %	11.82 %
Q2 2023	25.41 %	27.53 %	12.36 %
Q3 2023	31.70 %	31.16 %	13.28 %
Q4 2023	35.22 %	32.91 %	(4.52 %)

Per Share Data (Riyal)

Compared With The

Period	Shares Outstanding (M)	EPS (Riyal)	Adjusted EPS (Riyal)	Book Value (BV)
Q1 2014	180.00	1.40	1.40	11.62
Q2 2014	180.00	1.25	1.25	11.96
Q3 2014	180.00	1.25	1.25	11.25
Q4 2014	180.00	1.11	1.28	11.39
Q1 2015	180.00	1.05	1.22	11.67
Q2 2015	180.00	1.07	1.27	11.13
Q3 2015	180.00	1.07	1.28	10.82
Q4 2015	180.00	1.15	1.19	11.04
Q1 2016	180.00	1.11	1.15	10.78
Q2 2016	180.00	1.02	1.03	11.05
Q3 2016	180.00	0.90	0.90	10.77
Q4 2016	180.00	0.85	0.83	11.04
Q1 2017	180.00	0.70	0.68	11.13
Q2 2017	180.00	0.47	0.45	11.18
Q3 2017	180.00	0.38	0.36	11.24
Q4 2017	180.00	0.29	0.29	11.33
Q1 2018	180.00	0.21	0.18	11.34
Q2 2018	180.00	0.13	0.09	11.30
Q3 2018	180.00	0.08	0.05	11.33
Q4 2018	180.00	0.07	0.04	11.41
Q1 2019	180.00	0.15	0.15	11.49
Q2 2019	180.00	0.26	0.26	11.58
Q3 2019	180.00	0.38	0.38	11.72
Q4 2019	180.00	0.51	0.42	11.92
Q1 2020	180.00	0.58	0.44	12.06
Q2 2020	180.00	0.58	0.44	12.13
Q3 2020	180.00	0.55	0.41	12.00
Q4 2020	180.00	0.60	0.55	12.25
Q1 2021	180.00	0.62	0.62	12.14
Q2 2021	180.00	0.66	0.66	12.27
Q3 2021	180.00	0.64	0.64	12.12
Q4 2021	180.00	0.59	0.55	12.27
Q1 2022	180.00	0.54	0.50	12.41
Q2 2022	180.00	0.56	0.52	12.29
Q3 2022	180.00	0.61	0.57	12.44
Q4 2022	180.00	0.62	0.62	12.38
Q1 2023	180.00	0.61	0.61	12.49
Q2 2023	180.00	0.58	0.58	12.35
Q3 2023	180.00	0.56	0.56	12.49
Q4 2023	180.00	0.31	0.31	12.44

Period	Shares Outstanding (M)	EPS (Riyal)	Adjusted EPS (Riyal)	Book Value (BV)
2014	180.00	1.11	1.28	11.39
2015	180.00	1.15	1.19	11.04
2016	180.00	0.85	0.83	11.04
2017	180.00	0.29	0.29	11.33
2018	180.00	0.07	0.04	11.41
2019	180.00	0.51	0.42	11.92
2020	180.00	0.60	0.55	12.25
2021	180.00	0.59	0.55	12.27
2022	180.00	0.62	0.62	12.38
2023	180.00	0.31	0.31	12.44

Multiple Ratios (End of Period Price)

Compared With The

Period	P/E	Adjusted P/E	Price/book
Q1 2014	17.07	17.07	2.06
Q2 2014	20.30	20.30	2.12
Q3 2014	21.54	21.54	2.40
Q4 2014	19.00	16.52	1.85
Q1 2015	21.16	18.27	1.91
Q2 2015	20.72	17.37	1.98
Q3 2015	15.78	13.24	1.56
Q4 2015	13.00	12.53	1.35
Q1 2016	11.15	10.74	1.14
Q2 2016	12.23	12.19	1.13
Q3 2016	11.76	11.71	0.98
Q4 2016	15.17	15.51	1.16
Q1 2017	15.21	15.63	0.95
Q2 2017	20.90	21.76	0.89
Q3 2017	25.26	26.59	0.84
Q4 2017	36.71	36.71	0.94
Q1 2018	50.51	59.67	0.93
Q2 2018	76.05	More than 100	0.85
Q3 2018	More than 100	More than 100	0.76
Q4 2018	More than 100	More than 100	0.73
Q1 2019	59.18	59.18	0.77
Q2 2019	34.20	34.20	0.78
Q3 2019	27.64	27.64	0.90
Q4 2019	23.10	28.24	0.99
Q1 2020	15.67	20.67	0.75
Q2 2020	17.11	22.57	0.82
Q3 2020	21.63	28.96	1.00
Q4 2020	20.36	22.09	0.99
Q1 2021	20.98	20.98	1.07
Q2 2021	28.51	28.51	1.53
Q3 2021	25.33	25.33	1.34
Q4 2021	22.78	24.57	1.09
Q1 2022	26.81	29.11	1.17
Q2 2022	20.71	22.42	0.95
Q3 2022	18.30	19.68	0.90
Q4 2022	17.32	17.32	0.87
Q1 2023	18.23	18.23	0.89
Q2 2023	20.49	20.49	0.97
Q3 2023	19.68	19.68	0.88
Q4 2023	33.72	33.72	0.85

Period	P/E	Adjusted P/E	Price/book
2014	19.00	16.52	1.85
2015	13.00	12.53	1.35
2016	15.17	15.51	1.16
2017	36.61	36.61	0.94
2018	More than 100	More than 100	0.73
2019	23.10	28.24	0.99
2020	20.36	22.09	0.99
2021	22.78	24.57	1.09
2022	17.32	17.32	0.87
2023	33.72	33.72	0.85

Business Segments (Million)

Compared With The

Period	Clinker	Cement	White Cement	White Clinker	Pozzolana

Period	Clinker	Cement	White Cement	White Clinker	Pozzolana
2021	0.87	457.17	103.88	-	-
2022	342.28	121.31	114.49	39.70	0.18
2023	431.94	109.95	102.83	44.84	-

Analysts Estimates (Million)

Item	Q4 2023 (e)	Q4 2023 (a)	Change‬
Average	27.00	(7.93)	(129.4 %)

Estimates vs Actual (Million)

Item	Q4 2023 (e)	Q4 2023 (a)	Change
Hermes	27.00	(7.93)	(129.4) %

Financial Ratios

	Current
Market Cap (M Riyal)	1,629.00
Enterprise Value (EV) (M)	2,350.46
Shares Outstanding ((M))	180.00
EPS ( Riyal) (TTM)	0.48
Book Value (BV) ( Riyal)	12.48
Par Value ( Riyal)	10.00
Adjusted P/E (Last12)	39.70
P/E (TTM)	18.84
Price/book	0.73
Return on Average Assets (%) (TTM)	2.5
Return on Average Equity (%) (TTM)	3.8

Northern Region Cement Co. (NORTHERN CEMENT)

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Northern Cement 2023 earnings fall 50% to SAR 56.4M; Q4 loss at SAR 7.8M

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Financials (M)

Current Quarter Comparison (M)

Financial results (Million)

Financial results (Million)

Profitability

Profitability

Per Share Data (Riyal)

Per Share Data (Riyal)

Multiple Ratios (End of Period Price)

Ratios And Multiples

Business Segments (Million)

Revenue by Business Segment (Latest) 2023 Q4

Analysts Estimates (Million)

Analysts Estimates (Million)

Estimates vs Actual (Million)

Estimates Accuracy

Financial Ratios

Share Price

Northern Region Cement Co. (NORTHERN CEMENT)

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Northern Cement 2023 earnings fall 50% to SAR 56.4M; Q4 loss at SAR 7.8M

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Financials (M)

Current Quarter Comparison (M)

Financial results (Million)

Financial results (Million)

Profitability

Profitability

Per Share Data (Riyal)

Per Share Data (Riyal)

Multiple Ratios (End of Period Price)

Ratios And Multiples

Business Segments (Million) 2023

Revenue by Business Segment (Latest) 2023 Q4

Analysts Estimates (Million)

Analysts Estimates (Million)

Estimates vs Actual (Million)

Estimates Accuracy

Financial Ratios

Share Price

Northern Region Cement Co. (NORTHERN CEMENT)

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Business Segments (Million)