Saudi Cement Sector Sales at their Highest Level, in 11-month -Al-Ahly Capital

Saudi cement sector recorded sales of 5.29 million tons in January 2022, an increase of 2.5% on monthly basis (a decrease of 11.3% on an annual basis), with a 3.1% increase in domestic sales to SR4.84 million tons (a decrease of 2.3% y/y), the highest monthly total and domestic sales since March 2021, according to Al-Ahli Capital.

Shipments fell to 381,000 tons (down 60.3% on an annual basis and 9.5% on monthly basis), the lowest monthly exports since May 2020, owing to rising shipping costs.

Companies in the western region gained the most market share (up 60 basis points), while companies in the eastern region lost the most market share (down 60 basis points) (down 138 basis points).

Al-Ahly Capital recommended neutrality for the shares of 6 of 7 seven cement companies, included in the report, while recommending an increase in weight for the shares of Qassim Cement company, noting that dividends for 3 of the companies exceeded their dividends by 6%, with the Eastern Cement company having the lowest E/P profit, at 17.5 times.

The market share of local cement companies’ sales in the western region was the highest (60 basis points on monthly basis, to 26.5%), while the market share of companies in the southern region decreased (138 basis points, to 13.5%), with ten companies increasing their market share on monthly basis.

Al Safwa cement, Qassim cement, and Najran cement all had monthly market share increases of 0.63%, 0.55%, and 0.47%, respectively.

Source: Al-Ahli Capital