3.40 AM Thursday, 18 July 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:12 05:36 12:28 15:51 19:14 20:38
18 July 2024

Oman Cement warns profit may fall on prices

By Agencies

Oman Cement Co, the country's largest cement firm by market value, said on Wednesday it was in talks with its government owner about raising prices and otherwise may face a second fall in annual profit.


"If we don't increase cement prices by 1 to 2 rials per tonne, profit might come down in 2008," Oman Cement Chief Executive Officer Jamal al-Hooti said in an interview in the Omani capital, Muscat.


"This is due to high clinker prices, which are rising because of high freight costs," Hooti said.


Higher freight costs probably mean the company's cement output this year will hold steady at 1.8 million tonnes as they will discourage the purchase of imported clinker, Hooti said.


Clinker is a rocky material used to make cement, of which Oman Cement imports 30 per cent and produces 1.2 million tonnes locally, Hooti said.


Asked about any plans to raise cement prices, Hooti said: "We are still discussing it with the government."


Oman Cement, whose biggest rival is Salalah-based Raysut Cement Co, sells its output at 26 rials ($67.55; Dh247.91) per tonne.


Profit last year fell more than 14 per cent to 17.62 million rials, its first decline in at least six years.


Shares of Oman Cement are up about 20 percent this year, compared with 18 per cent for the main stock index. The shares were up 1.3 per cent at 0854 GMT. In contrast, shares of Raysut Cement have surged about 23 per cent.


Oman Cement expects to double clinker output to 2.4 million tonnes per year by December 2009 after expanding production facilities, Hooti said. (Reuters)