After the prices of natural gas doubled in January this year, the net profit of the Oman Cement Company has been brought down by 40 per cent. The second largest cement producer in the Sultanate declined from OMR 9.09 million for the first half of 2014 to OMR 5.44 million in the same period last year.
The Oman government on January 1 doubled the price of natural gas for industries from 20.5 baisas per standard cubic meter to 41 baisas per standard cubic meter, presenting an inbuilt increase of 3 per cent on an annual basis thereafter.
This revision had an impact on the net earnings of gas intensive sectors such as ceramic tiles, cement, glass, and steel manufacturers, given that a major portion of the manufacturing cost is basically fuel. Oman cement mainly blames higher energy cost for the fall in profits.
The company, in the first half of its results, said that Oman Cement has, however, continued its measures to reduce the repercussions by selling price management and better cost.
The profit before tax during the six month duration slumped by 39.26 per cent from OMR 9.92 million for the first half of 2014 to OMR 6.02 million for the same period in 2015. This also includes OMR 2.1 million as part of the income on sale for investments meant for available for sale.
The sales revenue of the company was a little less at OMR 25.53 million in the first half of 2015 compared to OMR 25.71 million during the same period in 2014. The total income was pegged at OMR 25.71 million in the first half of this year, compared to OMR 26.04 million over the course of the review period.
The production of Oman Cement dropped from 1,032,898 tonnes of cement in the first half of 2014 to 1,008,779 tonnes for the same period this year.