Northern Region Cement Co. is expected to post better financial results in the fourth quarter (Q4) of 2018, on higher white cement sales, Obeid Saad Al-Subaei, general manager of the company, told CNBC Arabia.
Al-Subaei adopted an optimistic outlook for the industry in the short-term, in line with Saudi Vision 2030, adding that the cement sector is witnessing a rally after export fees were cancelled.
The Saudi cement producer is expected to fulfill around 30-40 percent of the domestic demand for white cement, said Al-Subaei.
“We will export the surplus to other markets, including Jordan, Iraq and West Bank,” he said.
“Our export destinations currently include Asia, Bangladesh, India and Australia. We soon plan to penetrate the US market,” Al-Subaei further added.
Al-Subaei also explained that the expenses of the company's project are slightly increasing, and the company so far can cover them. "The white cement sales are forecast to grow onwards, with more exports to the USA and Europe, due to its high value," he noted.
"The dividend payout policy hinges on the available cash; we will not secure loans to pay dividend, given that the company undertakes costly projects," Al-Subaei said.
The Saudi cement producer has SAR 1.2 billion of debt, which was cut to SAR 950 million. The cement producer is seeking to cut credit facilities and utilize cash flows to finance the ongoing projects.
"The white cement domestic consumption is forecast to grow gradually over the coming years," Al-Subaei said, adding that the company's current market share stands at 2.5-3 percent of the industry in the Kingdom.
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