OMAN: Oman Cement 2014 net profit declines 13% on weaker sales

Oman Cement Co’s net profit for the year 2014 declined by 12.8 per cent to RO13.15mn from RO15.08mn in the previous year. The decline was mainly due to lower volume of cement sales, lower clinker production and higher volumes of imported clinker, the company said in report released on Monday. 

Oman Cement imported higher volumes of clinker to bridge the temporary shortfall due to one of its kilns being closed for capacity enhancement.

The company said it would consider a joint venture (JV) for setting up a new cement plant after detailed studies.

It said the US$39mn project for installing an additional cement mill of 150TPH (tonnes per hour) capacity with supporting infrastructure of cement silos and bulk despatches is in progress and is expected to be completed during the fourth quarter of 2015.

Oman Cement achieved sales of 2,078,937MT of cement during 2014 against 2,101,631MT in the previous year, a decrease of 1.1 per cent. In value terms, total sales dropped 2.05 per cent last year to RO51.35mn from RO52.42mn in 2013.

“Market demand for cement in Oman remains good due to continued emphasis on infrastructure development. With the company's well-structured pricing policy, we hope that in spite of stiff competition with other cement manufacturers, particularly from neighbouring countries, the company will continue to do well to retain its market share,” the report said.The cement producer said that government's decision to double the price of natural gas, effective January 1, is bound to have a major impact on its performance in the coming years. “Similarly restrictions on carrying capacity for road transport of materials will also increase the cost of operations. However, we are committed to meet the challenge by directing our efforts towards better cost management.”

While the demand for cement is expected to remain good, the company will make efforts to increase it market share with the availability of higher quantity of cement after commissioning a new mill, which is expected to commence production during the last quarter of 2015, Oman Cement added.