Riyadh – Mubasher: NCB Capital expected local cement sales in Saudi Arabia to increase by 3.5% annually in 2021 to 52.8 million tonnes.
“We believe the Saudi cement companies are well-positioned to further improve their payouts in 2021, (pay-out ratios 106.3% for the sector), reflecting in an attractive 2021 dividend yield of 5.1%,” the company said in its Saudi Cement Sector Q1-21 Update.
Moreover, the research company upgraded its rating on Eastern Cement to “Overweight” whereas downgraded Yanbu Cement’s to “Neutral”.
Local cement prices averaged SAR 174 per tonne in the fourth quarter (Q4) of 2020, down by 16.1% and 8% from 2019 and Q3-20 levels, respectively. As demand improves across Saudi Arabia in 2021, prices are predicted to average SAR 183 a tonne.
“We maintain our positive outlook for the Saudi Cement sector. The ongoing housing programmes, pick-up in the Giga projects, and PIF’s 2021-2025 strategy are expected to be the key growth drivers,” NCB added.
