By Shane McGinley
12.4% drop in profits due to falling prices and the cancellation of hundreds of projects.
Gulf cement companies have seen profits fall by over 12 percent in the first half of this year as a result of the cancellation of hundreds of projects, it was reported on Sunday.
Figures from the Bahrain-based investment bank Gulf Finance House (GFH) found that cement companies in the region saw profits slump by 12.4 percent during the first six months of 2010, according to a report by the National newspaper.
Average debt among the companies also fell 8.9 percent and the downturn has also forced staff to take unpaid leave or transfers, the report added.
However, a spokesperson from UAE firm Unibeton Ready Mix, one of the largest concrete producers in the emirates, was optimistic about future prospects.
“The market has certainly quietened down during the summer and Ramadan months, although we are witnessing some renewed activity already,” she said.
The report added that government price controls introduced in May 2008 has also made is increasingly difficult for cement companies to turn a profit.
The GFH report found that cement prices averaged AED238.70 ($64.98) a tonne between January and June 2010, a year-on-year decline of 16.4 percent.
“The reason for such decline is because of stagnant and depressed projects activity in the region,” the report said.For all the latest Bahrain news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.