Cement companies in the Gulf Cooperation Council (GCC) bounced back into profits in 2011 after suffering from lower earnings in the wake of the 2008 global fiscal distress that halted many construction projects in the region, Kuwaiti-based Global Investment House (GIH) said. Saudi Arabia posted a healthy 22.6 percent increase in sales revenue and a 25.2 percent growth in net profits, the report said, while Qatar was the only one country reporting lower sales and profits. The UAE, the second largest cement producer in the GCC, witnessed a 5.3 percent decline in cement prices to reach $49 per ton. It said the fall was a result of the excess supply and low demand due to slowdown in real estate and construction projects. "The financial strength of the GCC cement companies continued to remain strong to weather any problem in the cement market as assets and equity increased by 4.5 and 4.4 percent respectively last year," GIH said. "On the other hand, debt grew by 2.7 percent to $2,497 million but debt to equity ratio fell to 22.5 percent in 2011 from 22.8 percent in 2010." Sales revenue swelled by 14.2 percent to $4.57 billion last year from around $4 billion in 2010 while net profits edged up by 2.7 per cent to $1.47 billion from about $1.44 billion. The combined assets of the companies in the GCC also rise by around 4.4 percent to $14.85 billion from about $14.22 billion in the same period, the report said. "The GCC cement sector witnessed a turnaround after two years of decline in top line following the credit crisis wave that halted major real estate activity and construction projects affecting cement and building materials companies," GIH said in the report. UAE, Saudi Arabia, Oman, and Kuwait reversed the declining revenues in 2010 and reported increasing sales for 2011 except Qatar. The UAE which has seen lower sales revenue since 2008, enjoyed a 5.9 percent increase in sales to reach $940 million. Oman also witnessed a 12.8 percent rise in sales revenue, which reached $342.3 million, the second highest revenue in Oman's cement history. However Oman reported a 39.4 percent decrease in net profits in 2011.
