Saudi cement sector has not witnessed any impact from the coronavirus pandemic in terms of y-o-y volume growth during the first quarter of 2020, according to a report by Al Rajhi Capital
The total market volume in Q1 grew 33% on an average when compared to last year. The companies under our coverage combined together witnessed similar y-o-y average growth, it stated.
From the companies under coverage, Qassim Cement reported the highest y-o-y growth of 53% followed by Yanbu Cement and Yamama Cement with y-o-y growth of 43% and 38%, respectively, it added.
However, restrictions imposed by the government to reduce the spread of the virus have encountered project delays, which may directly impact the cement demand in the kingdom may cause under-utilization of capacities.
This along with the Ramadan season are expected to lower cement volumes and thereby the revenue of the producers mainly in the month of April and May.
Tabuk Cement has already made an announcement that it expects impact of this epidemic on its financial results, said the report by Al Rajhi Capital.
The pandemic has further hammered the oil price to its lowest, which may result into lower government spending in the country. This might disrupt the current and future projects including housing and infrastructure, it added.-TradeArabia News Service
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