The Saudi stock market witnessed a significant announcement regarding the performance of the construction sector, with Al Madinah Cement a notable decline in profits during 2025. The company's net profit fell by 10.5% to SAR 128.9 million, compared to SAR 144.1 million in 2024. This decline highlights the current challenges facing the cement sector in the Kingdom.
The evolution of the Saudi cement sector's performance and pricing challenges
The cement industry is a cornerstone of the Saudi economy, closely linked to the Kingdom's urban development and Vision 2030 projects. Historically, this sector has witnessed significant growth, but it is also characterized by intense competition among producers. According to the company's official statement published on the Saudi Stock Exchange (Tadawul) website, the primary reason for the decline in net income this year compared to last year is not weak demand; on the contrary, sales volume has increased. The real challenge lies in the lower average selling price this year, reflecting the intense price competition driven by supply and demand dynamics in the local market.
The impact of declining profits at Al Madina Cement on the local and regional market
in Al-Madinah Cement's profits carries significant implications that extend beyond the company itself, impacting the local and regional economic landscape. Locally, this decrease reflects the need for cement companies to reassess their pricing strategies and operational cost management to maintain sustainable profit margins, especially given the continued influx of major construction projects. Regionally, the stability of the Saudi cement sector plays a pivotal role in meeting the needs of neighboring markets, and any fluctuations in profits could prompt companies to seek new export markets to compensate for declining domestic prices. The company's ability to increase its sales volume despite lower prices underscores the strength of its market share and its high level of competitiveness.
Details of cash dividend distributions to shareholders for 2025
Despite the decline in net income, the company was keen to reward its shareholders and maintain the attractiveness of its stock in the financial market. In this context, the board of directors of Al Madina Cement Company decided to distribute cash dividends to shareholders for the second half of 2025, in addition to a portion of retained earnings. The company clarified in its statement that the total amount allocated for distribution is SAR 70 million. Accordingly, the dividend per share will be SAR 0.5.
Regarding the timelines, the company added that the entitlement date will be March 30 of this year for shareholders who own shares at the end of trading on that day, while the actual distribution date has been set for April 20, which enhances investors’ confidence in the company’s cash liquidity and its ability to meet its obligations to its shareholders.
Future outlook for the construction sector
In conclusion, financial experts anticipate that the cement sector in Saudi Arabia will continue to play a vital role in supporting infrastructure development. Despite temporary fluctuations in profit margins due to price changes, ongoing government support for major development projects provides a fertile environment for price recovery and sales growth in the medium and long term. Strategies for diversifying revenue streams and improving production efficiency will remain crucial in determining the companies' trajectory in the coming period.
