Cement Dispatches for September 2016 - Aljazira Capital
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
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Thousand Tonne
Cement Dispatches decline 22.9%MoM, 21.7%YoY; Clinker inventory Dispatches Growth reaches unprecedented levels. According to the data released by Yamamah 6,000 Cement Co, Cement dispatches for the month of September-2016 stood at 5,000 3.4mn tons, as compared to 4.3mn tons in September-2015, depicting a 4,000 decline of 21.7%YoY, 22.9%MoM.
60.0% 40.0% 20.0% 0.0%
3,000
On MoM basis, all cement companies showed a decline in dispatches. AlSafwa cement showed the worst decline by 36.2%MoM followed by Arabian cement with a decline of 31.9%MoM. Whereas, Aljouf cement and Qassim cement companies showed the least decline of 8.9%MoM and 13.6%MoM respectively. On YoY basis, only Aljouf and Tabuk cement companies showed growth in dispatches at 16.1%YoY and 4.9%YoY respectively. Najran cement and Northern cement witnessed a fall of 46.3%YoY and 44.7%YoY respectively.
Sep-16
Jul-16
Aug-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Dec-15
Oct-15
Nov-15
Sep-15
Overview: the MoM decline is attributed to the impact of Hajj season that -20.0% 2,000 resulted in slowdown in construction. For 9M-2016, cement sales declined from 1,000 -40.0% 45.1mn tons in 2015 to 42.7mn tons in 2016 depicting a decline of 5.4%YoY, primarily driven by decrease in dispatches during month of June and third Source : Yamama Cement Company, AlJazira Research quarter. Nevertheless, despite challenges, we expect cement sector demand Share in Dispatches by Regions to show signs of recovery in Q4-2016 due to seasonal impact in 3Q-2016. Share in Dispatches Share in Inventory Regions Sep-15 Sep-16 9M-2015 Sep-15 Sep-16
Central Region Western Region Southern Region Eastern Region Northern Region
28.04% 30.89% 28.97% 29.51% 28.54% 21.41% 19.27% 21.80% 18.12% 17.42% 21.24% 19.77% 19.25% 17.19% 15.00% 17.63% 17.74% 17.88% 22.02% 23.94% 11.68% 12.33% 12.10% 13.17% 15.10%
Source : Yamama Cement Company, AlJazira Research
Key Performance: Data/Ratios Market Cap(bn) P/E (TTM) P/B Dividend Yield: YTD (%) ROA ROE
43.7 7.8x 1.4x 11.4% 28.5% 12.5% 16.4%
Clinker inventory to record a new high: Clinker inventory continued to increase reaching new historical high of 26.6mn ton depicting an increase of 13.9%YoY due to weak demand and higher production to sales ratio. AlSafwa cement showed a significant increase of 41.2%MoM in clinker inventory , followed by Arabian cement which showed increase of 19.0%MoM. In addition, Aljouf and Tabuk cement companies’ clinker inventory witnessed a Inventories Level 30,000 Clinker Inventories decrease of 2.0%MoM and 0.6%MoM respectively.
14%
Change %
12%
25,000
10%
20,000
8% 6%
15,000
4%
10,000
2% 0%
5,000
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Oct-15
-2%
Nov-15
0
Sep-15
Market Share: Aljouf cement showed an improvement in its market share as it increased from 2.9% in September-2015 to 4.2% in September-2016. Moreover, Tabuk cement increased its market share from 1.9% to 2.5%. On the other hand, Najran cement company market share declined to 4.9% in September-2016 as compared to 7.2% in September-2015, followed by Northern cement as it declined from 3.9% in September 2015 to 2.8% in September 2016.
-4%
Source : Yamama Cement Company, AlJazira Research
Key Data Dispatches Region Central Region
Western Region Eastern Region Southern Region
Northern Region
Companies Yamamah Cement City Cement Qassim Cement Riyadh Cement Total Yanbu Cement Arabian Cement AlSafwa Cement Total Saudi Cement Eastern Cement Total Najran Cement Southern Cement Total Northern Cement AlJouf Cement Tabuk Cement Hail Cement Total Total
1
Sep-15
Sep-16
"M/M %
% change Y/Y
9M-15
448 250 316 322 1,336 472 323 138 933 582 178 760 238 637 875 116 158 112 119 505 4,409
446 194 322 255 1,217 481 336 112 929 539 226 765 311 611 922 170 124 82 131 507 4,340
355 175 273 247 1,050 347 220 88 655 461 142 603 167 505 672 94 144 86 95 419 3,399
-20.8% -30.0% -13.6% -23.3% -21.4% -26.5% -31.9% -36.2% -29.8% -20.8% -20.2% -20.7% -29.8% -20.7% -23.2% -19.0% -8.9% -23.2% -20.2% -17.0% -22.9%
-20.4% -9.8% -15.2% -3.1% -13.7% -27.9% -34.5% -21.4% -29.5% -14.5% -37.2% -21.2% -46.3% -17.3% -27.1% -44.7% 16.1% 4.9% -27.5% -17.4% -21.7%
4,274 1,886 3,218 2,438 11816 5,140 3,966 1,384 10489 5,751 2,282 8033 3,325 6,259 9584 1,698 1,237 973 1,280 5,188 45,109
Analyst
Analyst
+966 11 2256248 [email protected]
+966 11 2256146 [email protected]
Jassim Al-Jubran
© All rights reserved
Clinker Inventory Levels
Aug-16
Waleed Al-jubayr
% Change Aug-16 4,154 -2.8% 3,784 2,355 24.9% 1,017 3,081 -4.3% 866 2,772 13.7% 1,604 12,362 4.6% 7,271 4,443 -13.6% 3,528 3,492 -11.9% 558 1,367 -1.2% 221 9,302 -11.3% 4,307 5,669 -1.4% 4,282 1,963 -14.0% 1,775 7,632 -5.0% 6,057 2,313 -30.4% 2,620 5,904 -5.7% 1,152 8,217 -14.3% 3,772 1,542 -9.2% 576 1,464 18.3% 1,225 1,037 6.6% 934 1,122 -12.3% 1,162 5,165 -0.4% 3,897 42,678 -5.4% 25,304
9M-16
Sep-15
Sep-16
3,356 780 955 1,811 6902 3,358 788 93 4239 3,801 1,349 5150 2,667 1,354 4021 867 652 746 815 3,080 23,392
3,981 1,091 919 1,610 7,601 3,664 664 312 4,640 4,508 1,868 6,376 2,751 1,244 3,995 662 1,201 928 1,230 4,021 26,633
YoY % MoM % Change Change 18.6% 5.2% 39.9% 7.3% -3.8% 6.1% -11.1% 0.4% 10.1% 4.5% 9.1% 3.9% -15.7% 19.0% 235.5% 41.2% 9.5% 7.7% 18.6% 5.3% 38.5% 5.2% 23.8% 5.3% 3.1% 5.0% -8.1% 8.0% -0.6% 5.9% -23.6% 14.9% 84.2% -2.0% 24.4% -0.6% 50.9% 5.9% 30.6% 3.2% 13.9% 5.3%
Source: Yamamah Cement Company, AlJazira Capital
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Company News & Events Date of Company Name Announcement
Corporate Event & Announcement
Tabuk Cement
29-09-2016
Tabuk Cement Co. will begin commercial operations at its second production line in Q2-2017. Production, which was set to begin in the fourth quarter of this year, has been delayed due to certain shortfalls in design.
Qassim Cement
06-10-2016
Qassim Cement Co.’s board of directors has recommended distributing a 10% cash dividend of SAR 1 per share for Q3-2016.
Qassim cement
09-10-2016
Qassim Cement Co. reported a net profit of SAR 321.1mn for the first nine months of 2016; a 28% drop compared to the same period last year on lower sales volume and value, driven by lower demand on cement. The company reported a Q3 net profit of SAR 70.4 million; 38.8% YoY decline. The profit for the period was 39% lower than in the previous quarter.
Arabian Cement
18-07-2016
Arabian Cement Company’s board of directors has recommended the distribution of a 20% cash dividend (SAR 2 per share) for the first half of 2016.
Umm Al-Qura
18-09-2016
Umm Al-Qura Cement Co. started commercial operations at its new Portland cement production line. The cement producer added that it would be difficult to measure the financial impact at this stage due to supply and demand factors.
City Cement
26-07-2016
City Cement Co.’s board of directors has recommended the distribution of a 7.5% cash dividend at the rate of SAR 0.75 per share for the first half of 2016.
Southern Cement
25-07-2016
Southern Province Cement Co. has recommended the distribution of a 25% cash dividend (SAR 2.5 per share) for the first half of 2016.
Northern Cement
10-08-2016
The board of directors of Northern Region Cement Co. approved the distribution of a 4.5% cash dividend at the rate of SAR 0.45 per share for first half of 2016.
Yamama Cement
21-07-2016
Yamama Cement Co.’s board of directors has recommended paying shareholders a 2.5% cash dividend (SAR 0.25 per share) for Q2-2016
28-08-2016
Southern Province Cement Co. has started trial operations of the second production line at its Bisha plant on August 25, which will continue until it reaches its capacity of 5,000 tons of clinker a day. The company said that it doesn’t expect any financial impact at this stage, adding that it will announce further developments in due course.
Southern Cement
Source: The Saudi Stock Exchange - Tadawul
Market Share in Saudi Cement Sector (%)
1.0%-
Share in dispatches- September 2015
2
-10.0% -30.0%
Hail
10%
10.0% 7.4% -
-
-
1.0%
City
8%
0.3%
29.4%
-
-
Riyadh
7%
3.0%
Tabuk
Others
15.2% -
Arabian
10%
5%
Eastern Cement
30.0%
23.7% 31.4%
Southern
Najran cement
4%
16.4%
19.8%
5.0%
Yamama
Qassim Cement
8.3%
Eastern
Arabian Cement
50.0%
33.9%
7.0%
Saudi
14%
Yamama Cement
48.3%
AlSafwa
9.0%
Yanbu
27%
Yanbu Cement
90.0% 70.0%
7.9%
11.0% 1.6%
Qassim
Saudi Cement
% Change in Share in Dispatches
AlJouf
13.0%
15%
Southern Cement
5.5%
9.2%
Northern
15.0%
Najran
Market Share for the month of September 2016
-50.0%
Share in dispatches- September 2016
Source: Yamamah Cement Company, AlJazira Capital
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Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
Yamama Cement
4,000
Qassim Cement
Sep -16
Jul-16
Aug-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
2%
3,000 2,500
0%
2,000
-2%
1,500
-4%
1,000
-6%
0
Sep -16
500
Jul-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
-30%
Nov-15
0
Oct-15
-20%
Sep-15
100
8% 4%
3,500
Aug-16
-10%
200
Change %
-6%
6%
Jun-16
300
Clinker Inventories(1000 Ton)
4,500
Apr -16
0%
-4%
500
20%
400
-2%
1,000
5,000
10%
0%
1,500
30%
500
2%
2,000
May-16
600
4%
2,500
Mar -16
% Change
6%
3,000
0
10% 8%
Feb-16
Dispatches(1000 Ton)
700
Change %
3,500
Jan-16
800
Clinker Inventories(1000 Ton)
4,000
Dec-15
Saudi Cement
4,500
Nov-15
Sep-16
-60%
Aug-16
0
Jul-16
-40%
Jun-16
100
May-16
-20%
Apr -16
200
Mar -16
0%
Feb-16
300
Jan-16
20%
Dec-15
400
Nov-15
40%
Oct-15
500
Sep-15
60%
Oct-15
80%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
600
Sep-15
700
-8%
50%
1,200
400
30%
1,000
300
20% 10% 0%
800
5%
600
0%
400
-5%
-30%
200
-10%
-50%
0
-15%
Southern Cement
20%
1,000
30% 10% 0%
-10% -20%
200
-30%
100
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep -16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
0%
800
-10%
600 400
-20%
200
-30%
-50%
0
-40%
60%
4,000
-40%
Sep-15
10%
Hail Cement
Sep -16
300
20%
1,200
Aug-16
400
Change % 30%
Jul-16
500
Clinker Inventories(1000 Ton)
1,400
Jun-16
600
0
1,600
May-16
700
15%
Souhtern Cement
60% 50% 40%
Apr -16
800
% Change
Feb-16
Dispatches(1000 Ton)
Mar -16
900
Jan-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Dec-15
Nov-15
Oct-15
Sep-15
0
Jan-16
-40%
Jan-16
50
Dec-15
-20%
100
Dec-15
150
Nov-15
-10%
200
Change %
10%
Nov-15
250
Clinker Inventories(1000 Ton)
Oct-15
350
40%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
450
Sep-15
500
Yanbu Cement 600
40%
500
20%
-6%
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Sep -16
-4%
0
-60%
0
Aug-16
-2%
500
Jul-16
0%
1,000
Jun-16
1,500
May-16
2%
-20%
Apr -16
2,000
Mar -16
4%
0%
-40%
100
3
6%
2,500
Feb-16
200
10% 8%
Jan-16
300
Change %
3,000
Dec-15
400
Clinker Inventories(1000 Ton)
3,500
Nov-15
% Change
Oct-15
Dispatches(1000 Ton)
Sep-15
700
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
-40%
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
Oct-15
Nov-15
Sep-15
0
-50% -60%
400
0%
20%
300
-20%
200
-40%
100
0
-60%
Sep -16
100
-30%
40%
500
Jul-16
-10% -20%
600
Aug-16
200
60%
700
Jun-16
0%
300
80%
Apr -16
400
100%
Change %
800
May-16
20% 10%
Mar -16
30%
Clinker Inventories(1000 Ton)
900
Feb-16
40%
Arabian Cement 1,000
Jan-16
500
50%
Dec-15
% Change
Nov-15
Dispatches(1000 Ton)
Oct-15
600
Sep-15
Arabian Cement
Eastern Cement
300
Dispatches(1000 Ton)
% Change
250
10%
200
0%
150
-10%
100
-20%
50
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
-40%
AlJouf Cement 40% 30%
Sep -16
Aug -16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Sep -16
Aug-16
30%
600
20%
500
10%
400
0%
300 200
-10%
0
-30%
-20%
100
800
150%
600
100%
400
50%
200
0%
Sep -16
Jul-16
Aug-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
0
Jan-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
300%
-10%
-50%
Jan-16
Change %
0%
-40%
Dec-15
Clinker Inventories(1000 Ton)
200%
-30%
0
1,400
250%
-20%
50
50% 40%
700
Dec-15
100
60%
1,000
10%
150
-6%
1,200
20%
Oct-15
Change %
800
Nov-15
% Change
200
Nov-15
Clinker Inventories(1000 Ton)
900
Oct-15
Dispatches(1000 Ton)
Sep-15
1,000
Al Jouf Cement
250
4
-4%
Sep-15
Oct-15
Nov-15
-30%
Sep-15
0
30% 20%
-2%
Sep-15
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
0
Jan-16
-60%
Dec-15
0
Oct-15
500
Nov-15
-40%
Sep-15
50
Northern Cement
0%
1,000
Sep -16
-20%
100
Jul-16
150
2%
Jul-16
0%
4%
1,500
Aug-16
200
6%
2,000
Jun-16
250
20%
10% 8%
May-16
300
Change %
2,500
Jun-16
40%
Apr -16
350
Clinker Inventories(1000 Ton)
May-16
60%
-2%
Najran Cement 3,000
Mar -16
80%
Apr -16
400
% Change
Mar -16
Dispatches(1000 Ton)
-1%
Feb-16
Najran Cement 450
0
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
Oct-15
Nov-15
Sep-15
-40%
Feb-16
0
0%
200
Jan-16
-30%
400
Jan-16
50
1%
600
Jan-16
-20%
2%
800
Dec-15
100
3%
1,000
Dec-15
-10%
4%
1,200
Nov-15
0%
150
5%
Nov-15
200
6%
1,400
Dec-15
10%
7%
Change %
1,600
Nov-15
250
Clinker Inventories(1000 Ton)
1,800
Oct-15
20%
2,000
Oct-15
300
40% 30%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
Sep-15
350
-50%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
Tabuk Cement
Tabuk Cement
40%
800
80
0%
60
-20%
300
Sep -16
Jul-16
Aug-16
Jun-16
0
May-16
-60%
50% 0% -50%
100
Apr -16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Jan-16
Feb-16
Dec-15
Nov-15
Oct-15
Sep-15
0
200
Mar -16
-40%
20
400
Jan-16
40
100%
600 500
200% 150%
Feb-16
20%
100
Change %
700
Dec-15
120
Clinker Inventories(1000 Ton)
900
Nov-15
% Change
1,000
Oct-15
Dispatches(1000 Ton)
140
60%
Sep-15
160
-100%
City Cement 60%
1,200
40%
1,000
250
20%
800
200
0%
600
-20%
400
Hail Cement
40% 30% 20%
300
10% 0%
250 200
-10%
150
-20%
100
-30%
50
-40% -50%
Safwa Cement
Sep -16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
0%
1,000
-2%
800 600
-4%
400
-6%
200
-8%
-50%
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
-20%
0
-40%
Sep -16
0
-40%
0%
50
Aug-16
-30%
20%
100
Jul-16
50
-20%
40%
Jun-16
-10%
60%
150
May-16
100
120% 80%
200
Apr -16
0%
140% 100%
Mar -16
10%
Change %
250
Feb-16
150
20%
Jan-16
30%
Clinker Inventories(1000 Ton)
300
Dec-15
200
350
Nov-15
40%
Oct-15
% Change
50%
Sep-15
Dispatches(1000 Ton)
Nov-15
1,200
AlSafwa Cement
250
Oct-15
6%
2%
1,400
0
-10%
4%
1,600
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
Change %
Sep -16
20%
1,800
Aug-16
30%
350
Clinker Inventories(1000 Ton)
2,000
Jul-16
40%
Jun-16
50%
May-16
% Change
Apr -16
Dispatches(1000 Ton)
0
Mar -16
Riyadh Cement
-50%
Feb-16
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
-5%
200
Feb-16
-40%
Sep-15
Sep -16
0%
400
-30%
20
5
Aug-16
600
-20%
Jan-16
40
400
Jul-16
5%
-10%
60
450
Jun-16
800
Jan-16
80
10% 0%
Dec-15
100
15% 10%
1,000
Dec-15
120
Change %
1,200
Nov-15
140
Clinker Inventories(1000 Ton)
1,400
Nov-15
160
50%
Oct-15
% Change
Oct-15
180
-10%
Hail Cement
Dispatches(1000 Ton)
Sep-15
200
-5%
May-16
-60%
0
Apr -16
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Hail Cement
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
0%
200
Feb-16
-40%
5%
Mar -16
50
10%
Jan-16
100
25%
15%
Dec-15
150
Change %
20%
Nov-15
300
Clinker Inventories(1000 Ton)
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
350
Sep-15
400
-60%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
RESEARCH DIVISION
Acting Head of Research
Talha Nazar +966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Jassim Al-Jubran +966 11 2256248 [email protected]
Waleed Al-jubayr +966 11 2256146 [email protected]
BROKERAGE AND INVESTMENT CENTERS DIVISION RESEARCH DIVISION
Sultan Al Kadi
Analyst
General Manager – Brokerage Services &
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment Centers & ADC
sales
brokerage
Brokerage
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
+966 12 6618443 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
Central Region
Abdullah Al-Rahit
Sultan Ibrahim AL-Mutawa
+966 16 3617547 [email protected]
+966 11 2256364 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
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Thousand Tonne
Cement Dispatches decline 22.9%MoM, 21.7%YoY; Clinker inventory Dispatches Growth reaches unprecedented levels. According to the data released by Yamamah 6,000 Cement Co, Cement dispatches for the month of September-2016 stood at 5,000 3.4mn tons, as compared to 4.3mn tons in September-2015, depicting a 4,000 decline of 21.7%YoY, 22.9%MoM.
60.0% 40.0% 20.0% 0.0%
3,000
On MoM basis, all cement companies showed a decline in dispatches. AlSafwa cement showed the worst decline by 36.2%MoM followed by Arabian cement with a decline of 31.9%MoM. Whereas, Aljouf cement and Qassim cement companies showed the least decline of 8.9%MoM and 13.6%MoM respectively. On YoY basis, only Aljouf and Tabuk cement companies showed growth in dispatches at 16.1%YoY and 4.9%YoY respectively. Najran cement and Northern cement witnessed a fall of 46.3%YoY and 44.7%YoY respectively.
Sep-16
Jul-16
Aug-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Dec-15
Oct-15
Nov-15
Sep-15
Overview: the MoM decline is attributed to the impact of Hajj season that -20.0% 2,000 resulted in slowdown in construction. For 9M-2016, cement sales declined from 1,000 -40.0% 45.1mn tons in 2015 to 42.7mn tons in 2016 depicting a decline of 5.4%YoY, primarily driven by decrease in dispatches during month of June and third Source : Yamama Cement Company, AlJazira Research quarter. Nevertheless, despite challenges, we expect cement sector demand Share in Dispatches by Regions to show signs of recovery in Q4-2016 due to seasonal impact in 3Q-2016. Share in Dispatches Share in Inventory Regions Sep-15 Sep-16 9M-2015 Sep-15 Sep-16
Central Region Western Region Southern Region Eastern Region Northern Region
28.04% 30.89% 28.97% 29.51% 28.54% 21.41% 19.27% 21.80% 18.12% 17.42% 21.24% 19.77% 19.25% 17.19% 15.00% 17.63% 17.74% 17.88% 22.02% 23.94% 11.68% 12.33% 12.10% 13.17% 15.10%
Source : Yamama Cement Company, AlJazira Research
Key Performance: Data/Ratios Market Cap(bn) P/E (TTM) P/B Dividend Yield: YTD (%) ROA ROE
43.7 7.8x 1.4x 11.4% 28.5% 12.5% 16.4%
Clinker inventory to record a new high: Clinker inventory continued to increase reaching new historical high of 26.6mn ton depicting an increase of 13.9%YoY due to weak demand and higher production to sales ratio. AlSafwa cement showed a significant increase of 41.2%MoM in clinker inventory , followed by Arabian cement which showed increase of 19.0%MoM. In addition, Aljouf and Tabuk cement companies’ clinker inventory witnessed a Inventories Level 30,000 Clinker Inventories decrease of 2.0%MoM and 0.6%MoM respectively.
14%
Change %
12%
25,000
10%
20,000
8% 6%
15,000
4%
10,000
2% 0%
5,000
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Oct-15
-2%
Nov-15
0
Sep-15
Market Share: Aljouf cement showed an improvement in its market share as it increased from 2.9% in September-2015 to 4.2% in September-2016. Moreover, Tabuk cement increased its market share from 1.9% to 2.5%. On the other hand, Najran cement company market share declined to 4.9% in September-2016 as compared to 7.2% in September-2015, followed by Northern cement as it declined from 3.9% in September 2015 to 2.8% in September 2016.
-4%
Source : Yamama Cement Company, AlJazira Research
Key Data Dispatches Region Central Region
Western Region Eastern Region Southern Region
Northern Region
Companies Yamamah Cement City Cement Qassim Cement Riyadh Cement Total Yanbu Cement Arabian Cement AlSafwa Cement Total Saudi Cement Eastern Cement Total Najran Cement Southern Cement Total Northern Cement AlJouf Cement Tabuk Cement Hail Cement Total Total
1
Sep-15
Sep-16
"M/M %
% change Y/Y
9M-15
448 250 316 322 1,336 472 323 138 933 582 178 760 238 637 875 116 158 112 119 505 4,409
446 194 322 255 1,217 481 336 112 929 539 226 765 311 611 922 170 124 82 131 507 4,340
355 175 273 247 1,050 347 220 88 655 461 142 603 167 505 672 94 144 86 95 419 3,399
-20.8% -30.0% -13.6% -23.3% -21.4% -26.5% -31.9% -36.2% -29.8% -20.8% -20.2% -20.7% -29.8% -20.7% -23.2% -19.0% -8.9% -23.2% -20.2% -17.0% -22.9%
-20.4% -9.8% -15.2% -3.1% -13.7% -27.9% -34.5% -21.4% -29.5% -14.5% -37.2% -21.2% -46.3% -17.3% -27.1% -44.7% 16.1% 4.9% -27.5% -17.4% -21.7%
4,274 1,886 3,218 2,438 11816 5,140 3,966 1,384 10489 5,751 2,282 8033 3,325 6,259 9584 1,698 1,237 973 1,280 5,188 45,109
Analyst
Analyst
+966 11 2256248 [email protected]
+966 11 2256146 [email protected]
Jassim Al-Jubran
© All rights reserved
Clinker Inventory Levels
Aug-16
Waleed Al-jubayr
% Change Aug-16 4,154 -2.8% 3,784 2,355 24.9% 1,017 3,081 -4.3% 866 2,772 13.7% 1,604 12,362 4.6% 7,271 4,443 -13.6% 3,528 3,492 -11.9% 558 1,367 -1.2% 221 9,302 -11.3% 4,307 5,669 -1.4% 4,282 1,963 -14.0% 1,775 7,632 -5.0% 6,057 2,313 -30.4% 2,620 5,904 -5.7% 1,152 8,217 -14.3% 3,772 1,542 -9.2% 576 1,464 18.3% 1,225 1,037 6.6% 934 1,122 -12.3% 1,162 5,165 -0.4% 3,897 42,678 -5.4% 25,304
9M-16
Sep-15
Sep-16
3,356 780 955 1,811 6902 3,358 788 93 4239 3,801 1,349 5150 2,667 1,354 4021 867 652 746 815 3,080 23,392
3,981 1,091 919 1,610 7,601 3,664 664 312 4,640 4,508 1,868 6,376 2,751 1,244 3,995 662 1,201 928 1,230 4,021 26,633
YoY % MoM % Change Change 18.6% 5.2% 39.9% 7.3% -3.8% 6.1% -11.1% 0.4% 10.1% 4.5% 9.1% 3.9% -15.7% 19.0% 235.5% 41.2% 9.5% 7.7% 18.6% 5.3% 38.5% 5.2% 23.8% 5.3% 3.1% 5.0% -8.1% 8.0% -0.6% 5.9% -23.6% 14.9% 84.2% -2.0% 24.4% -0.6% 50.9% 5.9% 30.6% 3.2% 13.9% 5.3%
Source: Yamamah Cement Company, AlJazira Capital
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Company News & Events Date of Company Name Announcement
Corporate Event & Announcement
Tabuk Cement
29-09-2016
Tabuk Cement Co. will begin commercial operations at its second production line in Q2-2017. Production, which was set to begin in the fourth quarter of this year, has been delayed due to certain shortfalls in design.
Qassim Cement
06-10-2016
Qassim Cement Co.’s board of directors has recommended distributing a 10% cash dividend of SAR 1 per share for Q3-2016.
Qassim cement
09-10-2016
Qassim Cement Co. reported a net profit of SAR 321.1mn for the first nine months of 2016; a 28% drop compared to the same period last year on lower sales volume and value, driven by lower demand on cement. The company reported a Q3 net profit of SAR 70.4 million; 38.8% YoY decline. The profit for the period was 39% lower than in the previous quarter.
Arabian Cement
18-07-2016
Arabian Cement Company’s board of directors has recommended the distribution of a 20% cash dividend (SAR 2 per share) for the first half of 2016.
Umm Al-Qura
18-09-2016
Umm Al-Qura Cement Co. started commercial operations at its new Portland cement production line. The cement producer added that it would be difficult to measure the financial impact at this stage due to supply and demand factors.
City Cement
26-07-2016
City Cement Co.’s board of directors has recommended the distribution of a 7.5% cash dividend at the rate of SAR 0.75 per share for the first half of 2016.
Southern Cement
25-07-2016
Southern Province Cement Co. has recommended the distribution of a 25% cash dividend (SAR 2.5 per share) for the first half of 2016.
Northern Cement
10-08-2016
The board of directors of Northern Region Cement Co. approved the distribution of a 4.5% cash dividend at the rate of SAR 0.45 per share for first half of 2016.
Yamama Cement
21-07-2016
Yamama Cement Co.’s board of directors has recommended paying shareholders a 2.5% cash dividend (SAR 0.25 per share) for Q2-2016
28-08-2016
Southern Province Cement Co. has started trial operations of the second production line at its Bisha plant on August 25, which will continue until it reaches its capacity of 5,000 tons of clinker a day. The company said that it doesn’t expect any financial impact at this stage, adding that it will announce further developments in due course.
Southern Cement
Source: The Saudi Stock Exchange - Tadawul
Market Share in Saudi Cement Sector (%)
1.0%-
Share in dispatches- September 2015
2
-10.0% -30.0%
Hail
10%
10.0% 7.4% -
-
-
1.0%
City
8%
0.3%
29.4%
-
-
Riyadh
7%
3.0%
Tabuk
Others
15.2% -
Arabian
10%
5%
Eastern Cement
30.0%
23.7% 31.4%
Southern
Najran cement
4%
16.4%
19.8%
5.0%
Yamama
Qassim Cement
8.3%
Eastern
Arabian Cement
50.0%
33.9%
7.0%
Saudi
14%
Yamama Cement
48.3%
AlSafwa
9.0%
Yanbu
27%
Yanbu Cement
90.0% 70.0%
7.9%
11.0% 1.6%
Qassim
Saudi Cement
% Change in Share in Dispatches
AlJouf
13.0%
15%
Southern Cement
5.5%
9.2%
Northern
15.0%
Najran
Market Share for the month of September 2016
-50.0%
Share in dispatches- September 2016
Source: Yamamah Cement Company, AlJazira Capital
© All rights reserved
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
Yamama Cement
4,000
Qassim Cement
Sep -16
Jul-16
Aug-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
2%
3,000 2,500
0%
2,000
-2%
1,500
-4%
1,000
-6%
0
Sep -16
500
Jul-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
-30%
Nov-15
0
Oct-15
-20%
Sep-15
100
8% 4%
3,500
Aug-16
-10%
200
Change %
-6%
6%
Jun-16
300
Clinker Inventories(1000 Ton)
4,500
Apr -16
0%
-4%
500
20%
400
-2%
1,000
5,000
10%
0%
1,500
30%
500
2%
2,000
May-16
600
4%
2,500
Mar -16
% Change
6%
3,000
0
10% 8%
Feb-16
Dispatches(1000 Ton)
700
Change %
3,500
Jan-16
800
Clinker Inventories(1000 Ton)
4,000
Dec-15
Saudi Cement
4,500
Nov-15
Sep-16
-60%
Aug-16
0
Jul-16
-40%
Jun-16
100
May-16
-20%
Apr -16
200
Mar -16
0%
Feb-16
300
Jan-16
20%
Dec-15
400
Nov-15
40%
Oct-15
500
Sep-15
60%
Oct-15
80%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
600
Sep-15
700
-8%
50%
1,200
400
30%
1,000
300
20% 10% 0%
800
5%
600
0%
400
-5%
-30%
200
-10%
-50%
0
-15%
Southern Cement
20%
1,000
30% 10% 0%
-10% -20%
200
-30%
100
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep -16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
0%
800
-10%
600 400
-20%
200
-30%
-50%
0
-40%
60%
4,000
-40%
Sep-15
10%
Hail Cement
Sep -16
300
20%
1,200
Aug-16
400
Change % 30%
Jul-16
500
Clinker Inventories(1000 Ton)
1,400
Jun-16
600
0
1,600
May-16
700
15%
Souhtern Cement
60% 50% 40%
Apr -16
800
% Change
Feb-16
Dispatches(1000 Ton)
Mar -16
900
Jan-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Dec-15
Nov-15
Oct-15
Sep-15
0
Jan-16
-40%
Jan-16
50
Dec-15
-20%
100
Dec-15
150
Nov-15
-10%
200
Change %
10%
Nov-15
250
Clinker Inventories(1000 Ton)
Oct-15
350
40%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
450
Sep-15
500
Yanbu Cement 600
40%
500
20%
-6%
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Sep -16
-4%
0
-60%
0
Aug-16
-2%
500
Jul-16
0%
1,000
Jun-16
1,500
May-16
2%
-20%
Apr -16
2,000
Mar -16
4%
0%
-40%
100
3
6%
2,500
Feb-16
200
10% 8%
Jan-16
300
Change %
3,000
Dec-15
400
Clinker Inventories(1000 Ton)
3,500
Nov-15
% Change
Oct-15
Dispatches(1000 Ton)
Sep-15
700
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
-40%
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
Oct-15
Nov-15
Sep-15
0
-50% -60%
400
0%
20%
300
-20%
200
-40%
100
0
-60%
Sep -16
100
-30%
40%
500
Jul-16
-10% -20%
600
Aug-16
200
60%
700
Jun-16
0%
300
80%
Apr -16
400
100%
Change %
800
May-16
20% 10%
Mar -16
30%
Clinker Inventories(1000 Ton)
900
Feb-16
40%
Arabian Cement 1,000
Jan-16
500
50%
Dec-15
% Change
Nov-15
Dispatches(1000 Ton)
Oct-15
600
Sep-15
Arabian Cement
Eastern Cement
300
Dispatches(1000 Ton)
% Change
250
10%
200
0%
150
-10%
100
-20%
50
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
-40%
AlJouf Cement 40% 30%
Sep -16
Aug -16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Sep -16
Aug-16
30%
600
20%
500
10%
400
0%
300 200
-10%
0
-30%
-20%
100
800
150%
600
100%
400
50%
200
0%
Sep -16
Jul-16
Aug-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
0
Jan-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
300%
-10%
-50%
Jan-16
Change %
0%
-40%
Dec-15
Clinker Inventories(1000 Ton)
200%
-30%
0
1,400
250%
-20%
50
50% 40%
700
Dec-15
100
60%
1,000
10%
150
-6%
1,200
20%
Oct-15
Change %
800
Nov-15
% Change
200
Nov-15
Clinker Inventories(1000 Ton)
900
Oct-15
Dispatches(1000 Ton)
Sep-15
1,000
Al Jouf Cement
250
4
-4%
Sep-15
Oct-15
Nov-15
-30%
Sep-15
0
30% 20%
-2%
Sep-15
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
0
Jan-16
-60%
Dec-15
0
Oct-15
500
Nov-15
-40%
Sep-15
50
Northern Cement
0%
1,000
Sep -16
-20%
100
Jul-16
150
2%
Jul-16
0%
4%
1,500
Aug-16
200
6%
2,000
Jun-16
250
20%
10% 8%
May-16
300
Change %
2,500
Jun-16
40%
Apr -16
350
Clinker Inventories(1000 Ton)
May-16
60%
-2%
Najran Cement 3,000
Mar -16
80%
Apr -16
400
% Change
Mar -16
Dispatches(1000 Ton)
-1%
Feb-16
Najran Cement 450
0
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Feb-16
Mar -16
Jan-16
Dec-15
Oct-15
Nov-15
Sep-15
-40%
Feb-16
0
0%
200
Jan-16
-30%
400
Jan-16
50
1%
600
Jan-16
-20%
2%
800
Dec-15
100
3%
1,000
Dec-15
-10%
4%
1,200
Nov-15
0%
150
5%
Nov-15
200
6%
1,400
Dec-15
10%
7%
Change %
1,600
Nov-15
250
Clinker Inventories(1000 Ton)
1,800
Oct-15
20%
2,000
Oct-15
300
40% 30%
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
Sep-15
350
-50%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for September 2016 October 2016 Saudi Cement Sector | Monthly Report | September 2016
Please read Disclaimer on the back
Dispatches & Inventory Changes
Tabuk Cement
Tabuk Cement
40%
800
80
0%
60
-20%
300
Sep -16
Jul-16
Aug-16
Jun-16
0
May-16
-60%
50% 0% -50%
100
Apr -16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Jan-16
Feb-16
Dec-15
Nov-15
Oct-15
Sep-15
0
200
Mar -16
-40%
20
400
Jan-16
40
100%
600 500
200% 150%
Feb-16
20%
100
Change %
700
Dec-15
120
Clinker Inventories(1000 Ton)
900
Nov-15
% Change
1,000
Oct-15
Dispatches(1000 Ton)
140
60%
Sep-15
160
-100%
City Cement 60%
1,200
40%
1,000
250
20%
800
200
0%
600
-20%
400
Hail Cement
40% 30% 20%
300
10% 0%
250 200
-10%
150
-20%
100
-30%
50
-40% -50%
Safwa Cement
Sep -16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
0%
1,000
-2%
800 600
-4%
400
-6%
200
-8%
-50%
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
-20%
0
-40%
Sep -16
0
-40%
0%
50
Aug-16
-30%
20%
100
Jul-16
50
-20%
40%
Jun-16
-10%
60%
150
May-16
100
120% 80%
200
Apr -16
0%
140% 100%
Mar -16
10%
Change %
250
Feb-16
150
20%
Jan-16
30%
Clinker Inventories(1000 Ton)
300
Dec-15
200
350
Nov-15
40%
Oct-15
% Change
50%
Sep-15
Dispatches(1000 Ton)
Nov-15
1,200
AlSafwa Cement
250
Oct-15
6%
2%
1,400
0
-10%
4%
1,600
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr -16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
Change %
Sep -16
20%
1,800
Aug-16
30%
350
Clinker Inventories(1000 Ton)
2,000
Jul-16
40%
Jun-16
50%
May-16
% Change
Apr -16
Dispatches(1000 Ton)
0
Mar -16
Riyadh Cement
-50%
Feb-16
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
-5%
200
Feb-16
-40%
Sep-15
Sep -16
0%
400
-30%
20
5
Aug-16
600
-20%
Jan-16
40
400
Jul-16
5%
-10%
60
450
Jun-16
800
Jan-16
80
10% 0%
Dec-15
100
15% 10%
1,000
Dec-15
120
Change %
1,200
Nov-15
140
Clinker Inventories(1000 Ton)
1,400
Nov-15
160
50%
Oct-15
% Change
Oct-15
180
-10%
Hail Cement
Dispatches(1000 Ton)
Sep-15
200
-5%
May-16
-60%
0
Apr -16
Sep-16
Aug-16
Jul-16
Jun-16
Apr -16
May-16
Hail Cement
Mar -16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0
0%
200
Feb-16
-40%
5%
Mar -16
50
10%
Jan-16
100
25%
15%
Dec-15
150
Change %
20%
Nov-15
300
Clinker Inventories(1000 Ton)
Oct-15
% Change
Sep-15
Dispatches(1000 Ton)
350
Sep-15
400
-60%
Source: Yamamah Cement Company, AlJazira Research
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RESEARCH DIVISION
Acting Head of Research
Talha Nazar +966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Jassim Al-Jubran +966 11 2256248 [email protected]
Waleed Al-jubayr +966 11 2256146 [email protected]
BROKERAGE AND INVESTMENT CENTERS DIVISION RESEARCH DIVISION
Sultan Al Kadi
Analyst
General Manager – Brokerage Services &
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AGM- Head of Western and Southern Region Investment Centers & ADC
sales
brokerage
Brokerage
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
+966 12 6618443 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
Central Region
Abdullah Al-Rahit
Sultan Ibrahim AL-Mutawa
+966 16 3617547 [email protected]
+966 11 2256364 [email protected]
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