Najran Cement likely to report 'good results' in Q2 2020, says CEO

Najran Cement Co. is expected to report strong financials in Q2 2020, Al Arabiya TV reported, citing Chief Executive Officer, Abdulsalam Al-Duraibi.

The company's total sales increased by 11% and 13% in April and May respectively, despite the overall slowdown in the whole industry, Al-Duraibi stated.

"We have reported profit growth in Q1 2020, as the COVID-19 outbreak has a minimal impact on the company's operations since it started in mid-March," he added.

"The coronavirus pandemic will have a minimal impact on the cement industry," the CEO noted, expecting the industry to post higher results by year-end, though projects might face some delay for a short period.

If the industry is negatively impacted this year, it will buck the downtrend by the coming year, given that the cement sector is a key pillar of Saudi Vision 2030, he noted.

Al-Duraibi indicated that the prepayment of Banque Saudi Fransi's (BSF) loan helped the company to save around SAR 1-2 million.

"Najran has a debt-to-asset ratio of nearly 14%, and a net debt ratio of 10% - the lowest in the industry and lower than the local market average," he added.

“The company's financial position is better than before. As cement firms have a one-time investment, but their assets are being amortized over the years," Al-Duraibi said, adding that the dividend payment decision is taken by the board of directors.

Najran Cement earlier requested BSF for a full pre-settlement of the remaining amount of its existing loan facility, which was provided to finance the Waste Heat Recovery (WHR) project with a total repayment of SAR 45 million, Argaam reported.

The cement producer posted a net profit of SAR 40 million in Q1 2020, compared to SAR 6.1 million in year-earlier period.