CAIRO: Suez Cement’s first-half net profit dropped 37 percent because of a fall in local cement consumption and political instability in the region, the Egyptian firm said in a statement on Sunday.
Suez, a subsidiary of Italcementi, said first-half profit was LE 412.4 million ($69.2 million), down from 653.8 million for the same period in 2010.
"Local consumption of regular portland cement declined by 4.9 percent in the first-half of 2011 … whereas Suez Cement’s sales declined by 14.3 percent," said Suez, Egypt’s largest listed cement maker by market value.
Industry analysts said they expected a slump in the net profit of most cement companies after mass protests that toppled President Hosni Mubarak interrupted construction operations.
The political upheaval also followed corruption cases against the heads of some of the country’s biggest listed real estate developers.
"Our expectations for Suez’s H1 was LE 401 million due to the political and economic uncertainty so the results are in-line," said Rehab Taha, a senior analyst at Prime Group.
"Demand for cement was weaker and there were thinner volumes of raw material because construction activities were lower and several real estate companies were involved in legal cases."
Taha said she expected Suez’s second-half net profit to be unchanged compared with its first-half of this year.
"I think we will also see that LE 400 million range in H2 for Suez given business slowdowns during the summer season, the month of Ramadan, and upcoming elections," Taha added.
The Muslim fasting month of Ramadan, which begins Aug. 1 in Egypt, is followed by parliamentary elections scheduled for later this year.
