The National Bank of Egypt (NBE) postponed the payment of four instalments of the Arabian Cement Company worth $8m, as well as the interest due, until April 2017. These instalments are premiums on a loan obtained by the company in 2008 worth $142m to finance the establishment of a new cement production line, in addition to 25% of the licence cost.
The net profits of the company fell during the first quarter of 2016 to EGP 34.15m compared to a net profit of EGP 57.37m during the same period in 2015, a decline of 40.5%. This coincides with a decline in revenues down to EGP 552.5m compared to EGP 589.7m during the period of comparison.
A report by Beltone Financial Investment Banking stated that the profits of the company were higher than the original expectations of EGP 536m. The 10% higher prices in the fourth quarter of 2015 contributed to making up for the falling sales volume.
Beltone Financial attributed the decline of profits mainly to the company’s loss due to currency exchange rate, where it suffered losses amounting to EGP76m during the first quarter of 2016, versus a loss of EGP 30.5m year-over-year.
Mubasher Trade Egypt stated, in a research report, that there is a slowdown in the demand for cement. The average operating rate is now 75% compared to 87% in 2015.
The report also noted that the improvement in cement prices helped the company strengthen its revenue and ease losses.