Although Aljazira Capital expects cement firms under its coverage to show an increase in Q4 sales when compared to the previous quarter, the sector’s profitability is likely to remain subdued, it said.
The slowdown is seen to extend to 2017 based on the weak outlook for the construction sector on the back of tight liquidity position and the government’s effort to prioritize its project pipeline to improve its efficiency.
“We expect the sector to show recovery over 2018 and into 2019 along with improvement in crude oil prices,” the report said.
Also, inventory levels are expected to remain high as a result of there being no immediate impact from lifting the export ban on cement producers, putting further pressure on prices.
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Aljazira Capital Q4 Profit Estimates (SAR mln) |
||
|
Company |
Q4-2016 Estimates |
Y-o-Y Variation |
|
Yamama Cement |
119.5 |
(34%) |
|
Saudi Cement |
210.7 |
+17% |
|
Southern Province |
191.9 |
(36%) |
|
Qassim Cement |
101.1 |
(28%) |
|
Arabian Cement |
119.8 |
(24%) |
|
Yanbu Cement |
172.5 |
(17%) |
|
Najran Cement |
27.4 |
(49%) |
|
Hail Cement |
27.8 |
(7%) |
|
City Cement |
47.5 |
(21%) |
|
Eastern Province |
54.3 |
(41%) |
|
Northern Cement |
29.8 |
(25%) |
|
Tabuk Cement |
14.8 |
(34%) |
|
Al Jouf Cement |
9.7 |
+36% |
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