Riyadh, Saudi Arabia — Arabian Cement Company reported a sharp 46.9% decline in net profit for the first half of 2025, totaling SAR 44.1 million, down from SAR 83.1 million in H1 2024. This came despite a 16.9% increase in revenue, which rose to SAR 470.9 million, according to a statement on Tadawul.

Arabian Cement H1 Profit Falls 47% to SAR 44M Despite Revenue Rise

Gross profit for the six months dropped 27.7% to SAR 85.2 million, while operating profit declined 39.4% to SAR 51 million. Total comprehensive income fell even further, down 55.8% to SAR 31.4 million. Earnings per share decreased to SAR 0.44 from SAR 0.83 a year earlier. Shareholders’ equity edged down slightly to SAR 2.52 billion from SAR 2.57 billion.

Q2 2025 Performance Weakened by Seasonal Impact

In Q2 2025, Arabian Cement recorded a net profit of SAR 20.5 million, down 29.1% from SAR 28.9 million in Q2 2024 and down 13.1% from Q1 2025. Revenue rose 32.9% year-on-year to SAR 232.8 million but dipped 2.2% from the prior quarter.

The company attributed the weaker Q2 profit to lower average selling prices and higher cost of sales, which offset the benefit of increased volumes. The sequential decline was driven by reduced sales during Eid holidays, despite higher other income, improved associate company performance, and lower zakat and tax expenses.

What This Means for Investors

  • Revenue resilience: Higher sales volume is driving topline growth despite pricing pressure.
  • Margin compression: Cost increases and price declines continue to pressure profitability.
  • Seasonal effects: Holiday-related sales drops impacted quarterly performance.
  • Industry outlook: Navigating cost and demand dynamics will be crucial for a strong H2 recovery.

 

THE SAUDI STANDARD’S VIEW: Arabian Cement Results Reflect Transitional Pressures Amid Construction Sector Realignment

Arabian Cement Company’s 47% drop in H1 2025 net profit to SAR 44.1 million, despite a 17% increase in revenue, reflects the dual pressures of rising costs and competitive pricing in a sector adjusting to post-pandemic normalization and cyclical demand shifts. While revenues have shown healthy expansion, sustained profitability will depend on recalibrating margins and improving operating efficiency in the quarters ahead.

  • The decline in gross profit (−27.7%) and operating income (−39.4%) indicates margin compression due to increased input costs, reflecting sector-wide inflationary pressures in fuel, freight, and materials. This trend is affecting many regional producers as they scale to meet the demand for infrastructure.
  • Seasonal factors, notably the Eid holidays in Q2, contributed to a sequential decline in volume and profit, underscoring the importance of demand planning and product mix optimization in cyclical industries such as cement.
  • Despite the earnings contraction, Arabian Cement continues to grow topline revenue—an encouraging signal of sustained market demand, likely fueled by active Vision 2030 projects in housing, industrial zones, and transport corridors.
  • Income from associates and higher other income helped offset some of the profit erosion, showing the value of diversified income streams even within a core industrial framework.

Arabian Cement’s results reflect a sector in adjustment, not in decline. As Saudi Arabia’s infrastructure pipeline remains robust, the company’s ability to streamline costs, manage pricing dynamics, and align with large-scale construction cycles will be key. The cement industry, foundational to the Kingdom’s transformation, must now match volume resilience with strategic financial discipline.

 

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