Saudi-based Qassim Cement Company has registered a revenue of SR232 miillion ($62 million) for the third quarter, up 21.8% over the same period last year, said Al Rajhi Capital, stating that it was higher than its estimate of 6.5%.
Growth in sales was supported by a 31.4% y-o-y growth in volume, though the same was moderated to a certain extent by a fall in average realization.
Cement sales volume for Q3 hit 1.2 million tonne, stated Al Rajhi Capital in its report, adding that it was 11.5% lower than its estimate.
Gross profits and operating income increased by 25.3% y-o-y and 26.5% y-o-y respectively.
Growth in gross profit and operating profits were aided by higher volumes and the resultant improvement in operating leverage, said the report.
For the nine months, Saudi Cement registered a volume growth of 35.6% y-o-y. Growth was aided by strong momentum in real estate activities in the local market.
Going forward, Al Rajhi Capital expects this trend to continue, though growth rates for 2021 will be tempered by the higher base this year.
"Average realizations are likely to come under pressure, given the competitive nature of the local market. We increase our target price to SR80/share from the earlier target price of SR75/share and have maintained our rating at Overweight," it added.-TradeArabia News Service
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