Saudi Arabia’s Yamama Cement (YSCC) has registered revenues of $56 million, a year-on-year drop of 10.8% attributed to a 13.9% y-o-y fall in average realisation, a report by Al Rajhi Capital has said.
According to a recently released report by the Saudi-based financial services provider cement sales volume for 4Q20 came in at 1.19 million tons, 0.9% higher than estimates, though the average realisation at SR177/ton was lower than estimates by 5.9%.
The report said that continued growth from mortgages aided volume growth, while competition among the local players kept the prices under check. Gross profit and operating income fell by 23.2% y-o-y and 24.8% y-o-y respectively and were impacted by lower realisation, it added.
In comparison, for 2020, YSCC registered a volume growth of 17.9% y-o-y. Growth was aided by strong momentum in real estate activities in the local market.
Going forward, this trend is expected to continue, though growth rates for 2021 will be tempered by the higher base in 2020, the report warned.
“The operating performance during the quarter was impacted by high price competition in the region. However, we expect the same to abate, going forward, and we expect average realisations to improve gradually, given the expected improvement in utilization,” the report concluded.