Duqm cement project depends on final feasibility report

Muscat: Plans to build a major cement project in Duqm will depend on the outcome of the final feasibility study, said Raysut Cement Company in its third quarter report.
Raysut Cement Company, along with Oman Cement Company, has registered a new company named Al Wusta Cement Company LLC. “The new company has been allotted 500,000 square meters of land for setting-up a new cement plant in Duqm by Special Economic Zone Authority of Duqm (Sezad). Al Wusta Cement Company has signed a usufruct agreement with Sezad, in this regard,” added Raysut Cement, in its third quarter report.
The project will be proceeded with a subject to outcome of final feasibility report.
Also, Raysut Cement Company’s new packaging plant is expected to be completed in the first quarter of 2018.
Raysut Cement said that the group has earned revenues of OMR54.71 million against OMR70.56 million in the same period last year, a decline of 22.5 per cent.
The profit before tax stood at OMR9.11 million, as against OMR18.42 million in the same period last year, a fall of 50.5 per cent. Also, the group operating profit stood at OMR8.15 million, against OMR18.05 million in the same period last year, a decrease of 54.8 per cent. “This is because of the lower volume of sales owing to competition in local markets and in export markets, mainly in Yemen, due to socio disturbance which resulted in the loss of some areas and increase in the cost of electricity/gas/coal i.e., with effect from January 2017.”
Further, the market value of securities decreased by OMR428,000, compared to the corresponding period last year, which is compensated by the profit from sales of an associated company, Oman Portuguese Cement Products LLC.
The profit after tax for the group has stood at OMR6.73 million against OMR16.66 million, a decrease of 59.6 per cent, during the corresponding period of last year. Apart from the cost increase, this is due to changes in the income tax law, as the tax rate increased from 12 per cent to 15 per cent. Further, deferred tax has also been adjusted to this effect which resulted in an increase in the deferred tax liability and, consequently, an increase in the provision of tax in the current period to OMR2,377,000, from OMR1,754,000 for the corresponding period of last year, i.e. an increase of 35.52 per cent.
In spite of the severe price competition in the markets from cement suppliers from neighbouring markets, and the volatility in the export market, the parent company has reached the sales revenue of OMR38.50 million during the current period, against OMR50.24 million for the last year, a decrease of 23.3 per cent.
The profit after tax for the parent company has stood at OMR7.22 million against OMR13.73 million, a decrease of 47.4 per cent, during the same period last year.