Saudi's Southern Cement's Q1 net profit falls 5.3pct

Southern Province Cement Co, Saudi Arabia's largest cement maker by market value, said its net profit fell by 5.3 per cent in the first quarter due to a continued export ban.

Southern Cement made a net profit of 189.6m riyals ($50.56m) in the three months to March 31 compared to 200m riyals in the same period the year earlier, the firm said in a bourse statement.

"The decline is due to lower sale incentives and the continuation of an import ban since mid-2008, as well as a decline in other income and a rise in general and administrative costs," the firm said.

Operational profit in the first quarter declined 5 per cent to 194m riyals.

Cement firms in Saudi Arabia are still faced with an export ban that was imposed almost two years ago after cement prices sky-rocketed after firms sought more lucrative offers abroad, leading to a shortage in the local market.

The ban, compounded by supply from new production lines in the country, resulted in a saturation of the local market which led to lower prices and profits for cement producers.

Southern Cement competes with other cement firms in the country, such as Saudi Cement Co, the country's second largest, which saw a 16.2 per cent rise in net profit for the first quarter, and Yamama Cement, which saw a 31 per cent increase in net profit.

Southern Cement's shares traded 1.4 per cent lower at 0932 GMT.