Northern Cement CEO expects revenue, profit growth in 2027 on new Iraq investment

Obaid Al-Subaie, CEO of Northern Region Cement Co. (Northern Cement)

Northern Region Cement Co. (Northern Cement) expects performance to remain stable in Q4 2026, with a positive outlook for revenue and profit growth starting next year, particularly with the commissioning of its new investment in Iraq, said CEO Obaid Al-Subaie.

In an interview with Argaam, Al-Subaie said the company expects to begin operating its new cement production line in Iraq in the near term. He noted that all overseas investments, including that in Iraq, contributed positively to its Q3 2026 results.

The third-quarter revenue hike was driven by higher export-related sales volumes and production in Syria, a higher market share there, and growth in sales from other overseas investments, he added.

Al-Subaie pointed out that the Saudi market witnessed weaker cement demand during Q3 2026, resulting in a slight decrease in domestic sales volumes. However, the company offset this impact through export sales and its subsidiaries, while selling prices varied to some extent.

As for higher costs and their impact on profit margins, the CEO explained that the slower gross profit growth compared with revenue was attributable to an 11% increase in operating expenses, as announced by the company in early 2026, in addition to higher raw material transportation costs at its subsidiaries.

Regarding regional geopolitics, he said the company had addressed the challenges with flexibility, enabling it to mitigate the negative impact of obstacles and absorb, to the extent possible, the increase in costs resulting from higher supply chain costs.

The CEO also pointed out that the company's long-standing export experience helped limit the negative impact of these developments on its export activities.

As for his outlook for cement prices in the Saudi market, Al-Subaie expects prices to remain stable in Q4 2026 and next year, while opportunities for improvement will continue to depend on market supply and demand levels.

Regarding the company's financial position, he said leverage inched higher quarter-on-quarter at the end of Q3 2026. He confirmed that no additional financing will be needed next year, as overseas expansion projects near completion.

According to data available on Argaam, Northern Cement's net profit rose 48% to SAR 54.85 million in 9M 2026, from SAR 37.05 million in the same period last year. The Q3 net profit reached SAR 23.76 million, up 48% YoY.