Arabian Cement Company, a leading building materials company in Saudi Arabia, announced a 3% increase in its net profit for 2025, reaching SAR 165 million, compared to SAR 160 million in the previous year. This positive performance reflects the company's resilience and ability to adapt to market changes, benefiting from the recovery in the construction sector driven by the major projects of Saudi Vision 2030.
Financial performance details and reasons for growth
According to the official statement published by the company on the Saudi Stock Exchange (Tadawul) website, the increase in net profit is due to a combination of integrated operational and financial factors. The company explained that the main reasons for the growth were:
- Increased sales volume: The group succeeded in increasing its sales volume, reflecting the strong demand for its products in the local market.
- Reduced depreciation expense: This reduction resulted from a review and change in the estimated economic useful life of the parent company's plant machinery and installations, leading to an improved cost structure.
- Lower financing costs: The company benefited from a decrease in financing costs, which contributed positively to boosting net profits.
- Increased other revenues: The company achieved growth in its non-operating revenues, which supported the bottom line.
Despite these positive results, the company faced some challenges that limited further growth, including the high cost of purchasing energy products for the parent company, increased sales and distribution expenses, a decrease in its share of profits from associate companies, and a rise in income tax expenses for the subsidiary.
The Saudi cement sector under Vision 2030
Arabian Cement Company was established in 1957 and is one of the oldest cement companies in the Kingdom. The cement sector plays a pivotal role in achieving the goals of Vision 2030, serving as the primary supplier for mega infrastructure projects such as NEOM, the Red Sea Project, Qiddiya, and other real estate and residential development projects. The performance of companies like Arabian Cement reflects the sector's close alignment with government and capital spending. The sector is expected to experience sustained demand in the coming years as the pace of these projects accelerates, thus enhancing the future prospects for the company and the sector as a whole.
Dividend payouts boost investor confidence
To further enhance the confidence of its shareholders, the Board of Directors of Arabian Cement Company recommended distributing cash dividends to shareholders for the second half of 2025. The company explained that the total amount recommended for distribution is 100 million riyals, at a rate of 1 riyal per share, which represents 10% of the nominal value of the share.
Dividend entitlement will be for shareholders who own shares at the close of trading on the second trading day following the date of the company's general assembly meeting, which will be scheduled later after obtaining the necessary regulatory approvals. These distributions are a strong indicator of the company's financial strength and its consistent policy of rewarding its shareholders.
