Saudi Arabia: Southern Province Cement Faces Cost Increase Due to Fuel Price Hike
The Southern Province Cement Company, based in Riyadh, has announced an expected increase in production costs due to the recent surge in fuel prices used in production. The company is actively exploring strategies to mitigate the financial impact of this increase.
In a recent bourse filing, the Southern Province Cement Company disclosed that the hike in fuel prices announced by the Saudi Arabian Oil Company (Aramco) in January is set to significantly affect its production costs. This development is anticipated to elevate the company's production expenses by 12.50%, prompting a search for effective measures to lessen the financial repercussions.
The announcement comes in the wake of the company's leadership changes in January, with the appointment of a new Chairman and Deputy Chairman. Despite these strategic moves, the company reported a 49.16% decline in net profits after Zakat and tax, totaling SAR 121 million in the first nine months of 2023, compared to SAR 238 million in the same period the previous year.
This situation mirrors the broader challenges faced by the cement industry in Saudi Arabia, as evidenced by the City Cement Company's earlier announcement of an approximate 8% total cost increase due to the same fuel price adjustments by Aramco.
Source: Zawya
