Yamamah stands ahead of its peers

Yanbu_Cement_1

Yamamah Cement Company (YSCC) published its Q2 2011 results recently.

According to the report by Saudi bank NCB Capital (NCBC), all profit lines were up 15-17 per cent, due largely to increased volumes, as well as higher prices for cement.

Gross profit

Q2 2011 came in at US$62mn, increasing 17 per cent YoY and two per cent below the NCBC estimate for Q2 2011 at US$63.4mn. Q2 2011 was an increase of 19 per cent QoQ

Operating profit

Q2 2011 came in at US$58mn, increasing 16 per cent YoY and 2 per cent below the NCBC estimate for Q2 2011 at US$59.4mn. Q2 2011 was an increase of 18 per cent QoQ

Net income

Q2 2011 came in at US$58.6mn, increasing 14.5 per cent YoY and 2.5 per cent below the NCBC estimate for Q2 2011 at US$60mn. Q2 2011 was an increase of 22 per cent QoQ

EPS

Q2 2011 came in at SR1.63 increasing 14.5 per cent YoY and 2.5 per cent below the NCBC estimate for Q2 2011 at US$0.4. Q2 2011 was an increase of 22 per cent QoQ

Yamamah has reported a good set of numbers for Q2 2011 with all profit lines up around 15-17 per cent YoY, although this was around two per cent below than NCBC estimate on all lines. NCBC argues that the strong YoY performance was mainly off the back of higher sales volumes, as well as higher YoY prices.

NCBC states that Yamamah’s sales volumes grew significantly by 24 per cent YoY in Q2 2011. Driven by this, all of Yamamah’s profit lines grew strongly YoY.

Gross income grew strongly by 17 per cent YoY to US$62mn, with EBIT up 16 per cent YoY to US$58mn driven largely by healthy top-line growth, according to NCBC. However, net income growth slowed and was up 14.5 per cent YoY to US$58.6mn due to lower other income. Given the volatile nature of other income, EBIT is a fairer representation of underlying performance.

NCBC remains positive on Yamamah given its location advantage and high capacity & stock level that will help it meet any increase in demand. Additionally, its low-cost advantage and ability to charge a premium are added benefits that make the company stand ahead of its peers.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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