Riyadh Cement Company delivered a solid QQ3 2024 performance, with revenue of SAR 203.0 million and a robust gross margin of 41.33%, supporting an operating income of SAR 74.62 million and a net income of SAR 94.58 million. The quarter benefited from a favorable mix and strong pricing discipline, as evidenced by a net income margin of 46.59%. A notable feature of the quarter was the company’s strong cash generation, with operating cash flow of SAR 104.04 million and free cash flow of SAR 94.68 million, culminating in a net cash position (net debt negative) of SAR 39.97 million despite a significant dividend payout in the period. This combination of high profitability and ample liquidity underscores Riyadh Cement’s earnings quality and capacity to support shareholder returns.
From a balance-sheet perspective, Riyadh Cement exhibits minimal leverage (total debt around SAR 4.09 million and net debt negative by SAR 39.97 million) and substantial liquidity, with cash and equivalents of roughly SAR 44.06 million and total current assets of SAR 669.75 million. The current and quick ratios (6.02x and 3.26x, respectively) reflect conservative working capital management. However, the company carries a lengthy inventory cycle (days of inventory outstanding approximately 232 days) and a relatively low asset turnover (0.11x), indicating potential efficiency improvements in working capital and asset utilization while cement demand remains cyclically sensitive.
Industry context remains constructive in Saudi Arabia, with ongoing public infrastructure investment supporting cement demand. Riyadh Cement’s QQ3 performance positions it favorably versus regional peers on margins and profitability, yet valuation remains a consideration for investors given peers’ diverse growth trajectories and leverage profiles. Overall, the QQ3 print supports an affirming but disciplined investment stance, emphasizing the balance between strong cash returns and the cyclicality inherent in cement markets.
Key Performance Indicators
Revenue
Increasing
203.01M
QoQ: 24.05% | YoY: 35.96%
Gross Profit
Increasing
83.91M
41.33% margin
QoQ: 5.76% | YoY: 97.50%
Operating Income
Increasing
74.62M
QoQ: 7.79% | YoY: 121.71%
Net Income
Increasing
94.58M
QoQ: 46.81% | YoY: 204.48%
EPS
Increasing
0.79
QoQ: 46.30% | YoY: 203.85%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: SAR 203,006,160; YoY +35.96%, QoQ +24.05%
- The quarterly top line benefited from resilient domestic cement demand and favorable pricing dynamics in QQ3 2024.
Gross Profit: SAR 83,911,952; YoY +97.50%, QoQ +5.76%
- Gross margin: 41.33% (0.4133); the expansion versus year-ago reflects better mix and pricing discipline amid benign input costs.
Operating Income: SAR 74,622,676; YoY +121.71%, QoQ +7.79%
- Operating margin: 36.76% (0.3676), signaling strong operating leverage and cost discipline.
Net Income: SAR 94,579,535; YoY +204.48%, QoQ +46.81%
- Net margin: 46.59% (0.4659). The year-over-year surge is aided by a tax benefit (income tax expense shown as negative SAR 19.33 million).
Earnings per Share (EPS): SAR 0.79; YoY +203.85%, QoQ +46.30%
- Diluted EPS: SAR 0.79; consistent with the undiscounted share base of ~120 million shares.
Cash Flow and Balance Sheet:
- Operating cash flow: SAR 104.04 million; Free cash flow: SAR 94.68 million; Net cash provided by operating activities: SAR 104.04 million.
- Dividends paid: SAR -120.54 million in the period, contributing to the net cash outflow and the observed decrease in cash despite high operating cash flow.
- Cash at end of period: SAR 44.06 million; Cash and short-term investments: SAR 134.69 million; Net debt: negative SAR 39.97 million (net cash).
- Current ratio: 6.02x; Quick ratio: 3.26x; Debt to assets: 0.22%; Equity per share and return metrics reflect a conservative leverage profile with constructive profitability.
Valuation and Productivity Metrics:
- Price to book: 1.90x; Price to earnings: 8.53x; Price to sales: 15.90x; Dividend yield: 3.73%. These multiples imply a balance between earnings quality and capital return, with Riyadh Cement trading at a modest premium to book value and a manageable earnings multiple in a cyclical sector.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
203.01M
35.96%
24.05%
Gross Profit
83.91M
97.50%
5.76%
Operating Income
74.62M
121.71%
7.79%
Net Income
94.58M
204.48%
46.81%
EPS
0.79
203.85%
46.30%
Key Financial Ratios
Gross Profit Margin
Good
41.30%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Excellent
36.80%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
46.60%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
5.13%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
5.57%
Return on equity is acceptable but below top-tier companies
Current Ratio
Strong
6.02
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.00
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Value
8.53x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Fair Value
1.90x
Price-to-book ratio reasonable for profitable companies
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