Najran Cement Company, a leading cement producer in Saudi Arabia, announced the successful completion of its share buyback program. This strategic move follows the approval of the Extraordinary General Assembly held on December 22, 2024, and reflects the company's commitment to executing its announced financial plans.
Financial transaction details
According to an official statement released on the Saudi Stock Exchange (Tadawul) website on Wednesday, the company completed the purchase of a total of 5.24 million shares, representing 3.08% of its total shares. The total value of this transaction reached approximately SAR 43.84 million, with an average purchase price of SAR 8.37 per share. These figures are an important indicator for financial analysts and investors regarding the company management's assessment of the current share price in the market.
Significance of buying treasury shares
Share buybacks are an important financial tool used by publicly traded companies to boost investor confidence. When a company like Najran Cement buys back its own shares, it sends a strong message to the market that management believes the current share price may be undervalued, or that the company has substantial cash reserves that it prefers to invest in its own shares rather than other, potentially less profitable, investment options. This process also typically improves the company's financial indicators, such as earnings per share (EPS), due to the reduced number of outstanding shares traded on the market.
Economic context and the Saudi cement sector
This move comes at a time when the cement sector in Saudi Arabia is undergoing fundamental transformations in line with the Kingdom’s Vision 2030. With the accelerating pace of mega-projects and infrastructure development, cement companies are gaining significant strategic importance. Najran Cement Company, with its vital geographic location in the southern region, is a key player in meeting local demand. The company’s ability to finance an acquisition of this magnitude underscores its strong financial position and its capacity to balance operating expenses, expansion plans, and maximizing shareholder returns.
Financial stability and future plans
In its statement, the company affirmed that the completion of this acquisition clearly reflects the strength of Najran Cement's financial position and its unwavering commitment to enhancing shareholder value. Most importantly, the company indicated that this transaction was conducted while maintaining ample cash flow and high financial flexibility, ensuring the continued support of its operations and future development plans without any disruption. This balance between rewarding shareholders and preserving liquidity is a fundamental pillar of financial sustainability amidst the volatility of global and local markets.
