Muscat - Raysut Cement Company, a leading cement producer in the GCC region, has posted a 12.6 per cent growth in its net profit for the year ended December 31, 2013, compared with the previous corresponding year.
The company reported a net profit of RO27.62mn for the year 2013, compared with RO24.53mn in the previous year, in its filing to the Muscat Securities Market (MSM) on Wednesday.
Raysut Cement's revenues grew marginally to RO93.29mn, from RO92.8mn in 2012, an increase of 0.5 per cent. The company's total cost of sales was at RO61.73mn, compared with RO62.88mn in 2012.
An EFG-Hermes note said that Raysut Cement's consolidated earnings rose 21 per cent in the fourth quarter 2013 to RO8.68mn, coming in 32 per cent above its estimate. EFG-Hermes said that, overall, the company reported a good set of numbers, supported by better-than-expected growth in margins and investment gains.
"The company reported an investment gain of RO1.84mn in Q4, which we typically do not forecast. The Q4 2013 revenue of the company increased by three per cent year-on-year to RO23.1mn, which was in line with our estimate. Gross margins improved significantly to 37.1 per cent in the fourth quarter verses our estimate of 31.1 per cent," EFG-Hermes said.
"We believe the improvement in margins could be due to a better cement price scenario in its home and export markets. We maintain our Neutral rating, as we believe the shares are trading at rich mutiples (2013 P/E of 15.5x and an expected dividend yield of 4.6 per cent)," EFG Hermes added.
Raysut Cement's earnings per share increased to 138bz for 2013, from 123bz in the previous year. Last year, Raysut Cement announced it will establish a cement terminal inside Duqm Port. The terminal will be used for the storing, packing and distribution of cement, with all facilities, including two silos in the capacity of 4,000MT each. The company said that the Duqm terminal is expected to commence operations in the second half of 2014.
Among other expansion plans, the company is looking to build a modern state-of-the-art cement terminal in Berbera Port, Somalia, and a grinding plant in Mukulla in the Republic of Yemen through joint ventures with local partners in the two countries.
© Muscat Daily 2014
