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Oman Cement posts record performance in Q4
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Thursday, 31 Jan 2013

Oman Cement posted the best quarterly performance in the final leg of 2012 with sales revenue reaching OMR 15.308 million showing an increase of 31.4% on YoY and 11.8% on QoQ.

The overall profit after tax for the year ended 2012 stood at OMR 17.511 million which increased significantly by 37.0% YoY thanks to higher sales and improvement in margins.

For the final quarter of 2012, the earnings of the company witnessed a significant jump of 50.0% on YoY and 21.1% on QoQ to OMR 4.652 million. PAT margins improved to 30.4% levels as compared to 28.1% in the Q3 of 2012.

The total revenue including other income stood at OMR 59.269 million in 2012, witnessing an upsurge of 16.9% on YoY basis. Although the breakup of total income is not disclosed in the preliminary results, the total revenue of the company includes other income which mainly comprises investment income.

Excluding the other income, the estimated revenue from the core operations has increased by 19% to OMR 57.070 million amid strong volume growth. During the 9 month period in 2012 sales volume grew by 21%.

The increase in cement sales is mainly driven by the increased government planned expenditure to complete the intended Infra projects such as ports, airports and roads. While the realization for the 2012 is estimated to be at OMR 24.7 per tonne as compared to OMR 25.7 per tonne at the end of 2011.

The reason for lower blended realization during the year is mainly on the back of higher off take in its bulk segment which has relatively lesser realization as compared to the bag segment.

During the year, the total expenditure including depreciation of the company grew by 9.4% on YoY to OMR 39.576 million owing to higher cost of sales as well as increase in depreciation expenses. The gross profit margins too have expanded by 168 bps on year on year to 48.2%.

According to a research report by Gulf Baader Capital Markets, the domestic revival cycle in the cement sector which commenced in 2012 is likely to continue in 2013 on the back of existing along with the newly announced infrastructure projects.

Overall we continue to remain positive on the company owing to sustainable sales volume in addition to cement selling price which is expected to hold at the current levels. Subsiding UAE cement dumping in Oman may further improve the market share of the Omani cement players going forward.

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