Saudi Arabia's biggest cement producer by market value said second-quarter profit increased by 29 per cent on higher sales and demand grew in the country.
Southern Province Cement reported a net income of 239 million riyals, up from 185m riyals in the same quarter last year, according to a filing on the Saudi bourse yesterday.
NCB Capital expected a profit of 233m riyals. Earnings per share in the second quarter came in at 1.71 riyals, increasing 29.1 per cent compared with the second quarter last year and 5.8 per cent up on the first quarter this year.
"This is a strong set of results from Southern Province," said Farouk Miah, an analyst at NCB. "We believe the better-than-expected demand base has aided Southern Province to record these numbers."
Shares of Southern Province declined slightly yesterday, down 0.3 per cent, to 75 riyals on the Saudi Tadawul All-Share Index. The stock has soared 22.4 per cent this year. The index fell 0.5 per cent lower to 6,423.29 points yesterday.
Saudi Arabia is expected to need two million homes by 2014 to keep up with the demands of a population that has quadrupled in 40 years.
Shares of cement companies have already had a decent run this year, up an average of 20 per cent over the past six months and outperforming the Tadawul All-Share Index, which is down 2.4 per cent in the same period.
King Abdullah ordered authorities in March to build 500,000 low-cost houses in different parts of the kingdom.
"Southern Cement remains one of our preferred names in the Saudi cement sector due to its plant locations in both the southern and western regions, as well as its ability to easily meet any incremental demand growth in Saudi," Mr Miah said.
Saudi Cement reported a 12 per cent increase in profits for the quarter of 213.7m riyals on Sunday and Yamama Cement posted a 22 per cent increase to 220m riyals in the same period, both compared with the second quarter of last year.