10/04/2010
Analysis: Cement sector is able to absorb the pressure
Margin size achieved by companies in the cement sector supports the positive outlook towards their ability to absorb pressure
Financial report expected the current production of cement and energy to generate surplus pressure on the cement market in the future, especially with the entry of new producers obtaining the licenses. The report prepared by Dr. Yassin Al-Jafari on the cement sector explained «the vision is still not clear for the sector despite that it achieved an increase in production with the entrance of four new plants which are Riyadh Cement, Madinah, Najran City, and Al-shmaliyah. And the «total energy output capacity of the sector 45.1 million tons annually, while production totaled Sales 36.7 million tons, and the situation reflects the size of current production and energy surplus, which amounted to 18.63 per cent, which can generate pressure on the market in the future, especially if the entry of new producers obtaining the licenses.
Following are more details:
The vision remains unclear for the sector despite it achieved an increase in production with the entrance of four new plants are Riyadh Cement, Madinah, Najran City, and Al-Shmaliyah ,the sector capacity reached 45.1 million tons in annual sales, while production was 36.7 million tons.
Such situation reflects our current production and surplus energy, which amounted to 18.63 per cent, which can generate pressure on the market in the future, especially with entrance of new producers obtaining the license.
Six sets of financial ratios was used, which are :the company attractiveness to shareholders (which are rates groups that measure the dimensions affecting the contributor decision), and the management qualification (a set of rates that measure the operating efficiency and control costs), and the company attractiveness for lenders (describes the company's loan ability) , and the ability to deal with the economy (in terms of liquidity management and current assets), and marketing capacity (rates groups that measure the efficiency of marketing activity), and also the market rates).
The company's ability to attract shareholders:
Emphasis was placed on six indicators, which are the net profit margin (which measures the balance of all sales of Real after covering all expenses), it should be noted that the best performance company is Qassim Cement and South Cement and Yanbu Cement, then finally Saudi cement.
Profit growth (measures the size of the improvement in profitability), the highest was Qassim Cement and Saudi cement and South cement, followed by the Arabian Cement.
The highest profit growth was to Al- Yamamah Cement and Qassim Cement, Yanbu Cement and Tabuk Cement.
Management qualification:
Five sets of rates were used, which is the rate of expenses to income (totalexpenses total measure the volume, including production), we find that at least here Qassim Cement and Cement south and Yanbu Cement and Cement Top Arab and Saudi cement.
Finally, the consumption to the cost of sales (measuring the load size on the costs)Tabuk Cement came the highest and cement and then Al-Yamamah cement followed by Saudi Cement ,Eastern Cement the less followed by Qassim Cement.
The ability to deal with economy:
Changing on the economic conditions, especially in the recovery pressure which plays the companies ability to control the liquidity and investments size.
According to the table there are five indicators along with the lack of information on accounts receivable (debtors) has been focusing on four levels here.
The two percentages measured by the liquidity and trading value and the company's ability to fulfill their obligations, Al- Yamamah Cement came highest followed by Eastern Cement and Qassim Cement ,the lower were Saudi cement and Arabia cement, and the top traded were Eastern Cement and Qassim Cement and South Cement, and the lowest here is Saudi cement and Arabian Cement .
The Marketing capacity:
Usually done through market share and depend on the company's production capacity, sales growth and production has been added to support the former. The top shares were Saudi cement and Al-Yamamah Cement followed by South Cement, the lowers here Tabuk Cement and Eastern Cement.
Production and export:
Saudi and Al-Yamamah Cement is the highest in terms of production and delivery (local sale) and the top exporter (a negative impact on the company due to its low export price by area source, as the Gulf is considered the best choice).
Order in conclusion:
Noted that the highest ranking is Qassim Cement and South Cement along with Al-Yamamah, Yanbu,,Saudi Cement, and Taubk at the end.
With reference to the previous indicators, we find that the productive capacity and amount of power available supported some companies due to the current conditions and trends of export which has not benefited by some people, perhaps because of past and present partners.
