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Arabian Cement's net profit declines 52% despite 11% revenue increase Devaluated Egyptian pound, high cost of transportation result in "tough quarter" for the company
Leading cement producer Arabian Cement recorded an 11% increase in revenues of EGP 585m, during the first quarter (Q1)of 2015, compared to the same quarter last year. This, however, did not lessen the significant drop in the company's net profits, which plummeted by 52% to reach EGP 56m. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) totalled EGP 184m, 19% lower than the EGP 227m recorded during the corresponding quarter last year. "Profit before tax declined by 45% compared to 2014 reaching EGP 86m," the company said in an official statement. The company said that higher transportation costs led to higher costs of production and impacted this quarter's results. "During Q1 of 2015, market prices fluctuated from a high point in January of an average of EGP651/ton, to a low in February of EGP613/ton, recovering in March to EGP627/ton," the company added. The company added that the devaluation of the Egyptian pound against the dollar influenced the company's foreign losses, which surged to EGP 31m in Q1 of 2015, compared to EGP 2.3m in Q1 of 2014. The company stated that despite it being a "tough quarter", it succeeded in operating at above 90% clinker capacity, and increased its sales volume. The company's market share also inched up by 1%, rising from 7% in Q1 of 2014 to 8% in Q1 of 2015. "By end of May, we will have also finished our conversion to our final fuel mix, which should see increased availability and decreased costs, positioning us in the lead line for the second half of the year in terms of capacity and sales," the company said.
