RAK Cement profit drops 63% on fuel cost

Ras Al Khaimah Cement Co first-quarter net profit fell 63 per cent on higher fuel costs and a 21-day annual shutdown.


With gas scarce, cement makers in the UAE are turning to imported coal to fire their furnaces to cope with surging demand for cement as the government of the world's sixth-largest oil exporter invests petrodollars in infrastructure projects.


Net income for the three months to March 31 was Dh10.2 million, compared with Dh27.6 million in the year-earlier period, it said in a statement on the bourse website on Sunday.


"The cost of natural gas substitutes... kept increasing during the quarter, which resulted in the reduction of net profit," it said in the statement.


Shares of RAK Cement, which are down more than 3 per cent this year, closed almost 1 per cent lower on Sunday, leading declines in Abu Dhabi's cement stocks.


In contrast, four of Saudi Arabia's five biggest cement producers by market value, including Southern Cement, posted first-quarter profit growth of at least 11 per cent on a jump in domestic demand. (Reuters)