Qassim Cement Co Increased Net Profits by 1.46%

Qassim Cement Co increased net profits by 1.46% in 2012 to $149.6m.

The company, which is based in the city of Buraydah, said that net profits for the fourth quarter of the year dipped by 2.1%, however, to $38.1m. It blamed this on the lower sale prices achieved.

Total sales volumes for the year dropped 2%.

Qassim Cement was set up in 1976 and sells ordinary Portland Cement as well as sulphate-resistant cement and limestone cement.

The company is in the midst of installing a new production line capable of producing 5,500 tons per day, which will eventually replace its aging first production line.

National Commercial Bank described the company s results as "muted", stating that they were broadly in line with expectations.

It retained its current Neutral recommendation on the stock, which is trading at SR: 81.8, slightly ahead of NCB s 12-month target price of 78.9m.

"Currently, Qassim Cement is running at a high utilization rate (+95%) and there is limited room to grow earnings since the price is capped at SR: 240 per ton," NCB said in an analysts note.

"However, the company has announced plans for expansion through adding a new line with a capacity of approximately 1.8mn tons (an increase of 44% to current capacity)."