(MENAFN - Times of Oman) Oman Cement Company (OCC) yesterday announced a 63.5 per cent jump in net profit at RO18.28 million for the first half of 2010, thanks to a phenomenal RO7.34 million government compensation for keeping cement prices low in the last two years.
The government has fully reimbursed the company for the losses accrued in 2008 and 2009 on import of clinker and cement, which was undertaken under the directions from the government. The amount of RO7.34 million received on this account by the company has been recognised as income during the current period, stated the companys vice-chairman Saleh bin Nasser Al Araimi.
OCC said that the profit before tax for the first half, excluding government reimbursement, stood higher at RO13.35 million, as compared to RO12.58 million for the same period of last year. However, sales revenue for the first half fell 18.9 per cent to RO28.82 million from RO35.55 million during the period.
The companys cost of sales also came down to RO15.76 million from RO23.27 million during the period. OCC shares inched down 0.9 per cent to close at 679 baisas amid 746,694 changing hand yesterday.
Severe competition from neighbouring countries resulted in an oversupply and had affected the companys sales volume. OCCs cement sales came down to 919,314 tonnes for the first half of 2010 from 1,133,503 tonnes for the same period last year.
The Oman Cement Company produced 914,700 tonnes of cement, which was 11 per cent lower than 1,028,804 tonnes produced for the same period last year.
But both Oman Cement and Raysut Cement this month reduced cement prices to remain competitive in the market.