Najran Cement CEO says Q2 buoyed by strong cash flows, drop in average selling costs to SAR 121/ton

Najran Cement Co.’s Q2 2020 positive financial results were lifted by a drop in the cost of sales to an average of SAR 121 per ton, CEO Abdulsalam Aldraibi, told Argaam in an exclusive on Tuesday.

The second quarter selling cost of sales is the lowest since Q2 2015, he explained.

The company reduced costs significantly in the last two years. Since 2019, Najran Cement has reaped the fruit of several cost and production efficiency initiatives, which were launched by the end of 2018.

“The first half figures were backed by very strong cash flows. Net cash flows from operations reached SAR 143 million, the highest level in over three years,” Aldraibi added.

Najran Cement has one loan only, which has been recently secured at a total value of SAR 355 million from Bank Aljazira. Over the last two years, the company repaid SAR 245 million worth of loans.

On the other hand, Aldraibi said he expects a minimal impact of the value-added tax (VAT) on the company’s sales in the near term.

Najran Cement’s H1 2020 net profit surged to SAR 73.1 million, from SAR 3.5 million a year earlier