Oman: Raysut Cement's operating profit fell by 26.7% in the first quarter of 2015 on a 100% increase in the price of natural gas supplied by the government and rising transportation costs. Group operating profit fell to US$15.6m from US$21.4m in the same period of 2014.

'This is mainly due to the increase in natural gas price by the government to US$3/MMBtu from US$1.5/MMBtu effective from 1 January 2015 and increases in other costs," said Raysut Cement said in its directors' report.

The report said that the quarter that ended on 31 March 2015 was very challenging compared with any of the previous quarters in the recent past. "Gas is a significant component of cost and the price was doubled. Transportation costs are on the rise due to restrictions on tonnage and the cascading effects of all have significant bearing on the cost of the product." In addition, the company said that the disturbances in Yemen, one of Raysut Cement's main export markets, have had a bearing on sales volumes.

During the quarter, group revenue fell by 1.6% to US$63.5m from US$64.5m in the same period of 2014. "Given the situation, the company has done extremely well in the first quarter to reach a level of revenue which is close to that of the previous year. By positioning the products in appropriate markets the average price realisation improved, neutralising the effect of cost increase to an extent. On the other hand, severe competition from UAE suppliers is continuing."

Raysut Cement sold 976,019t of cement and 3958t of clinker during the first quarter of 2015 compared to 100,6024t of cement and 7384t of clinker in the corresponding period of 2014. This represents a decrease by 2.98% in cement and 46.4% increase in clinker.