Muscat: Raysut Cement Company, Oman's largest cement firm, said its net profit for the first quarter of 2014 increased to OMR8.23 million from OMR8.17 million posted by the company for the same period of last year.
However, sales revenue stood lower at OMR24.82 million as compared to OMR25.22 million during the period under review, according to the company's first quarter results posted on MSM website.
Severe price competition
In spite of the severe price competition from the UAE suppliers, and the volatility in the export market, the company has achieved the sales revenue out of its Salalah operation for OMR17.89 million during the period of three months against OMR18.17 million achieved during the corresponding period in the previous year, a fall of 1.5 per cent. The group as a whole has sold 991487 tonnes of cement and 7384 tonnes of clinker during the quarter ended March, 2014 against 1020907 tonnes of cement only in the corresponding period of last year, indicating a decline of two per cent.
The company has sold 650979 tonnes of cement and 7384 tonnes of clinker in the three month period of current year against 673919 tonnes of cement only in the same period of last year, out of the operations in its Salalah plant.
In the first quarter of current year, Pioneer Cement has sold 355045 tonnes of cement against 369800 tonnes in the same period of last year, a decrease of four per cent. There was no sale of clinker during the current and previous year in Pioneer.
The construction segment in the GCC is taking its positive vibration further with much larger outlays being planned in near future. In the first quarter itself the contracts worth $40 billion have been awarded across Gulf Cooperation Council (GCC) countries and it is likely to touch $150 billion by the year end.
Iraq is on a significant developmental spree with a possible award of contract valuing $20 billion during the year, GCC might benefit from it apart from various major projects slated for unveiling within GCC itself. So there are significant opportunities going forward in 2014 as well as in later periods.
The actual developments in UAE till now are still to absorb the local capacity reasonably, leading to a severe pressure on demands and prices in Oman market during the quarter, which has impact on domestic sales. However the Yemen market has shown signs of improvements. The company's strategy to expand its market base to Yemen, East Africa and to other countries has helped through rise in export, particularly in Yemen market. In this competitive environment Company's focus on its internal efficiencies has given benefits to its advantages.
The group as a whole has produced 857533 tonnes of clinker and 982384 tonnes of cement during the period ended March, 2014 against 790830 tonnes of clinker and 991858 tonnes of cement in the same period of previous year. The overall production clinker went up by 8 per cent and that for cement went down by 1 per cent, respectively.
During the period, 545102 tonnes of clinker was produced in Salalah plant of RCC, against 538639 tonnes produced in the same period of previous year, an increase of 1 per cent.
The company produced 629428 tonnes of cement in its Salalah plant during three months, against 629342 tonnes produced during the corresponding period in the previous year, with a marginal increase in production volume.
During the period, the sales revenue, earned by Pioneer Cement amounted to OMR7.16 million compared with OMR7.49 million achieved in the same period of previous year.
Pioneer Cement has earned a profit of OMR1.54 million as against OMR1.15 million earned in the same period of previous year, in spite of the severe competitions faced by the company in the UAE and Oman markets.