Oman- Raysut Cement's 2015 net profit declines 24

2/13/2016 12:48:14 PM

(MENAFN- Muscat Daily) Muscat-

Raysut Cement Co one of the Middle East's leading cement producers reported a 23.6 per cent drop in net profit for 2015. Net profit fell to RO20.95mn from RO27.43mn in 2014.

The company reported total revenues of RO94.68mn for 2015 0.4 per cent higher from RO94.29mn in 2014. Its cost of sales rose to RO59.18mn from RO54.87mn.

Gulf Baader Capital Markets (GBCM) in a note said Raysut Cement's revenue came above its estimates of RO91.74mn.

The brokerage company said that despite the drop in Raysut Cement's exports to Yemen - which accounts for almost 15 per cent of its total sales - owing to the ongoing civil war the company managed to report splendid volumes sales and earnings during 2015. 'We believe the company has managed to explore new markets and was able to mitigate the sales impact from the Yemen market' it added.

GBCM said Raysut Cement's 2015 net profit came in line with its estimates of RO21.58mn.

'The net profit however declined by 23.6 per cent owing to the increase in feedstock prices.

Though we believe the company will be able to deliver better sales and earnings in upcoming quarters concerns remains on the prolonged trend of lower oil prices in turn weighing on the construction sector resulting in delay in execution of few projects or cancellation of non-priority projects which in turn may result in higher inventory or lower utilisation' the Oman's largest brokerage firm said.

On a quarterly basis Raysut Cement reported sales revenue of RO25.3mn in the fourth quarter of 2015 an increase of 7.5 per cent year-on-year according to GBCM. 'This is above our estimates of RO22.36mn. This is the best quarterly sales reported by the company since the first quarter of 2013' GBCM added.

Raysut Cement's fourth-quarter net profit stood at RO5.14mn a decline of 21 per cent year-on-year which came in below GBCM estimates of RO5.77mn.

Raysut shares jumped by 3.33 per cent to close at 992bz on Thursday. 'The stock corrected by 40 per cent during 2015 and looks attractive at current levels. We have a 'buy' rating on the stock with a fair value of RO1.25' GBCM added.

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