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Sales of Saudi Cement Companies Fall 7% in October

Sales of Saudi Cement Companies Fall 7% in October

Saturday, 11 November, 2017 - 12:30

Sales of Saudi cement companies are expected to rise after witnessing significant decline in recent months, which contributed to the low profitability of firms in the sector.

The latest data on sales of Saudi cement companies issued monthly showed that aggregate sales of 17 listed firms dropped seven percent to 4.10 million tons in October 2017, from 4.43 million tons in October 2016.

The only seven percent drop in sales in October confirms the improvement in the local real estate market in light of the increasing number of programs of the Ministry of Housing and the implementation of several government projects at the infrastructure level.

As Saudi Arabia moves towards a more expanding budget in 2018, according to Finance Minister Mohammed al-Jadaan, local cement companies are facing a new opportunity to increase sales and direct most of their production to the local market.

This comes despite the fact that some of these firms have obtained overseas export licenses during the past few months.

Saudi Arabia's cement companies posted a 58.7 percent drop in profits in the first nine months of the year compared to the same period last year.

On the other hand, Saudi Arabia Stock Market (TASI) increased 18 points or 0.26 percent to 6,954 on November 9 from 6,936 in the previous trading session.

During last week’s trades, cash flow rates increased by 22.5 billion riyals ($6 billion) compared to 15.9 billion riyals ($4.24 billion) during the previous week.

These new developments came at a time when the board of the Capital Market Authority (CMA) issued a resolution to adopt the updated Mergers and Acquisitions list, replacing the one adopted in 2007, with the updated list coming into force last Thursday.

This list proves the efforts of the CMA to regulate mergers and acquisitions in line with the best international practices in the field of mergers and acquisitions and with the powers conferred by the new corporate system in the Authority in respect with merger processes, one of which is a listed company in the Saudi Stock Exchange market, contributing to the implementation of the program of the CMA to achieve the Kingdom Vision 2030.

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