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Yanbu Cement is expected to see higher demand over the coming period, due to its adjacency to the government’s giant projects, CNBC Arabia has reported, citing chief executive Ahmed bin Abduh Zugail.
“Q1 2019 witnessed lower demand for cement, compared to a year earlier,” Zugail noted, expecting Saudi Arabia to see stronger cement demand after summer holidays and the Hajj season.
Last year, Yanbu Cement exported around 1.4 million tons of clinker and 200,000 of cement to Africa, Yemen and Bangladesh, offsetting the company’s revenue decline.
The Saudi cement producer currently has more than 4 million tons in inventories, which is equal to the company’s sales in 2018.
“Yanbu will proceed with exports in 2019, until local demand improves,” Zugail noted.
Zugail attributed the company’s FY18 results to the drop in the Kingdom’s cement demand by 13 percent, Western province (17 percent), in addition to a 21 percent fall in demand for the company’s products. Also, average selling prices retreated over fierce competition.
Yanbu undertook several price-cutting initiatives last year, as prices plummeted by a marginal 10 percent, offset by weak demand and lower sales.
Yanbu Cement is proceeding with cutting costs pertaining to the fuel consumption, Zugail noted, ruling out that the company may lay off employees in the short term.
Yanbu Cement reported a 71 percent profit decline year-on-year (YoY) to SAR 91.2 million in 2018, Argaam reported.
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