Raysut Cement, Oman’s biggest cement producer, yesterday announced a 47 per cent fall in profit before tax at RO10.17 million for the first nine months of 2011, against RO19.03 million posted for the same period last year.
However, the profit before tax in the previous year included the price subsidy of RO1.59 million received from the government for cement import, the company said in a statement posted on MSM website.
The decline in profit is attributable mainly to severe competitions faced by the company both in the domestic and the export markets impacting both volume and the price, which have started from the previous year. “The fall in the market value of investment also has added to the pressure.”
Pioneer Cement for the nine-month period earned a profit of RO1.49 million in spite of the severe competitions faced by the company in the UAE market.
Raysea Navigation, Raysut’s subsidiary that provides with shipping services, has started commercial operation during the year and has earned profit of RO470,000 during the period of nine months.
The group has earned revenue of RO62.67 million and the profit before tax of RO11.71 million. In spite of the severe price competition from the UAE suppliers, and the volatility in the export market, Raysut Cement has achieved the sales revenue of RO44.25 million during the period of nine months ending September 2011 against RO49.88 million achieved during the corresponding period in the previous year, a decline of 11 per cent.
The substantial developmental plan has been mooted or under execution in the central region of Oman with the facilities of modern port. It is expected that the economy in Oman would grow by 5 per cent at current prices.
The above developmental initiatives have led to larger demand in the infrastructure industry including cement. “However, the dumping of cement from UAE suppliers continues impacting the cement industry in Oman severely. With the larger growth in the region in the coming years, the situation is expected to improve though gradually.”
This has led the company to explore new avenues for growth in the export front and newer markets, the company’s initiative to further explore the potentials in the export market, alongside meeting the growing demands in the domestic front would place the company in a distinctly advantageous situation in the coming months and years.
The group as a whole has produced 2,533,512 tonnes of clinker and 233,214,1 tonnes of cement during the period ended September, 2011. During the period of nine months, 1,598,942 tonnes of clinker were produced in the Salalah plant of RCC, against 1,613,317 tonnes produced in the same period of 2010. It produced 1,362,628 tonnes of cement in its Salalah plant, against 1,537,913 tonnes produced for the same period last year.
The company has sold 1,538,901 tonnes of cement and 329,278 tonnes of clinker during the period against 1,556,788 tonnes of cement and 319,370 tonnes of clinker in the corresponding period in the previous year, registering a decline of about 1 per cent on cement and an increase of 3 per cent in sale of clinker.
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