Saudi Cement Sales Rise in June
Saudi cement companies witnessed a remarkable improvement in sales, which proves the vitality of the Kingdom’s economy and the effectiveness of the construction sector and contracting.
According to recent statistics, total sales of Saudi cement companies rose by 20 percent in June, compared with the same month of 2018.
The cement sector in the Saudi stock market has seen noticeable price hikes in past few weeks, which contributed to the rise in shares of all companies listed in this sector, recording a jump of up to 60 percent, compared to early this year.
In June, sales of 17 cement companies in the domestic market rose to 2.55 million tons, compared to sales of 2.13 million tons in the same month of 2018.
Saudi Arabia's announcement of the largest spending budget for 2019 is an important indicator of increased project implementation and high demand for construction materials, including cement.
Saudi cement companies listed in the local market posted a net profit of SAR 350 million ($93.3 million) in H1 2018, but this figure is expected to increase further.
The growth forecast for H1 2019 is the result of the profit of SAR 646.6 million ($172.4 million) registered by cement companies during Q1 2019.
The Q2 results are also expected to be positive compared to the same quarter last year, meaning listed cement companies will achieve much higher profits during H1 2019, compared to H1 2018.
In this context, reports by local cement companies show that seven companies have exported 145,000 tons of cement in June 2019, while five have exported clinker during the same month.
These developments come as global rating agencies forecast a bigger growth for the Saudi economy.
Moody's and Fitch affirmed Saudi Arabia's credit rating at A1 and A+ respectively, with a stable outlook.
These ratings demonstrate their high level of confidence in the Saudi economy and the effectiveness of economic reforms taken by the government.
Credit ratings by these agencies provide significant indicators for investors, while positive indicators show the strength, vitality and effectiveness of the Kingdom's economy.