Yamama Cement Company: Comprehensive Financial and Operational Analysis until

Yamama Cement Company was established in the 1980s as part of the Kingdom's efforts to enhance the basic materials sector and support urban development projects. The company began its operations by producing ordinary and Portland cement and expanded its operations to include several production sites, notably in the central region (Riyadh, Qassim) as well as Khamis Mushait in Asir.

Over the past decades, the company has witnessed repeated expansions by adding new production lines and developing manufacturing technologies, allowing it to achieve high production capacity that meets the growing demand for cement in the Saudi market. The company later listed its shares on the Saudi financial market (Tadawul), providing individual and institutional investors the opportunity to participate in the company's ownership.

The company's ownership is characterized by its diversity between the public and private sectors, with major stakes held by government agencies and strategic investors, enhancing its financial and organizational stability. The company continues to commit to applying the highest standards of quality and sustainability in its operations, in line with national transformations such as Vision 2030.

Yamama Cement Company's activities focus on the production of various types of cement, with an emphasis on ordinary and sulfate-resistant Portland cement, in addition to by-products such as clinker and gypsum. The company relies on the extraction and roasting of limestone, followed by grinding to produce clinker, which is then converted into ready-to-use cement for construction projects.

The company is distinguished by its strategic production sites, giving it a higher capacity to meet demand in the central and northern regions. The company's products are primarily used in housing projects, infrastructure, industrial constructions, and major government projects.

The company places great importance on quality, implementing strict monitoring systems at all stages of production, and continuously seeks to develop its production lines through modern technologies to enhance efficiency and reduce waste. The company is also committed to sustainability, having launched its first sustainability report in November 2025, outlining its efforts in environmental areas, reducing emissions, and improving energy consumption.

Yamama Cement Company has seen a significant improvement in its financial performance during 2024 and 2025. The company's net profit in 2024 reached approximately 420.7 million Saudi Riyals, an increase of about 38% from the previous year. This positive performance continued into 2025, with the company achieving net profits of 142.1 million Riyals in the first quarter (+24% year-on-year), 263.1 million Riyals by the end of the first half (+32%), and 299 million Riyals by the end of the third quarter.

This profit growth is attributed to improved local demand for cement, relatively stable prices, and better control over operating costs. The company's share price increased by 22.98% during the first half of 2025, and approximately 11.01% over the year, trading in the range of 32–33 Riyals.

The price-to-earnings ratio (P/E) was around 6-8 times, which is relatively low compared to the historical average for the sector, reflecting good profitability amid ample supply. The general assembly approved a cash dividend of 10% for 2024 (0.10 Riyals per share) in April 2025, providing the stock with a competitive dividend yield.

Yamama Cement Company places great importance on achieving stable returns for its shareholders. In 2024, the company approved a cash dividend of 10% of the nominal value of the share (0.10 Riyals per share), which was unanimously voted on at the general assembly held in April 2025.

The dividend distribution policy reflects the company's desire to balance maintaining the necessary internal liquidity for investment and development while providing a rewarding return to investors. This distribution ratio is considered within the moderate rates for the Saudi cement sector, which faces fluctuations in profitability depending on changes in demand and operating costs.

The company also retains a portion of profits as a reserve to address any future fluctuations or to finance expansion plans. The distribution policy is based on the results of the annual financial performance, recommendations from the board of directors, and approval from the relevant regulatory authorities.

Yamama Cement Company ranks prominently among Saudi cement companies, being one of the top five companies in the Kingdom in terms of market share and production. The company benefits from its geographical location in the central and northern regions, which gives it a competitive advantage in efficiently meeting local demand and reducing transportation costs.

The company faces direct competition from major companies such as Hail Cement (symbol 3001), Southern Region Cement (3040), and Arabian Cement (3002), in addition to other local and foreign companies.

Competition in the Saudi cement sector is characterized by moderate pricing strategies and avoiding excessive price wars to ensure profitability stability. Major companies also seek to improve operational efficiency and reduce costs to cope with pressures from demand fluctuations and fuel costs.

Reports indicate that Yamama Cement has successfully maintained its market share, achieving moderate sales growth during 2024-2025, benefiting from housing and infrastructure projects supported by Saudi Vision 2030.

Fuel (natural gas, coal, diesel) represents a significant element in the cost of cement production. Between late 2024 and early 2025, there was an adjustment in industrial fuel prices by decision of the Ministry of Energy, leading to an increase in operating costs by about 5-6%.

Yamama Cement responded to these changes by implementing efficiency improvement measures in consumption and shifting to alternative fuels such as coal or low-cost fuel. The company also worked on improving maintenance and operational processes to reduce waste and increase productivity.

Despite the direct impact on profit margins, the company's financial performance in 2025 showed continued profit growth, indicating the management's success in absorbing the impact of rising costs and maintaining its competitiveness in the market.

Yamama Cement has included plans to expand its production capacity in its future strategy by studying the establishment of a new factory in the Eastern or Northern region. As of the end of 2025, the company has not officially announced the start of the project, as it awaits suitable economic conditions, such as stable demand and prices.

In terms of sustainability, the company launched its first sustainability report in November 2025, focusing on its efforts to reduce energy consumption, lower carbon emissions, and improve recycling processes. The company seeks to align its operations with environmental and social governance standards, supporting the achievement of national Vision 2030 goals.

These initiatives are part of Yamama Cement's commitment to providing high-quality products with the least possible environmental impact while enhancing its contribution to the national economy and local community.

Yamama Cement plays an active role in implementing Saudi Vision 2030 projects, as it plays a pivotal role in supplying the necessary cement for housing, infrastructure, and major government projects.

The company benefits from the increasing demand resulting from the acceleration of housing programs, the development of smart cities, and major industrial projects. The company also meets the quality and sustainability requirements imposed by new government regulations, ensuring its continued role in supporting national development.

Yamama Cement is also exploring export opportunities to Gulf and African markets, enhancing its ability to utilize surplus production capacity and improve profit margins amid local saturation.

Yamama Cement Company features a diverse ownership structure, including government agencies, investment companies, and individual investors. Among the prominent shareholders are the Saudi Electricity Company, the Saudi Marketing and Production Company, in addition to local banks and investment funds.

This diversity in the shareholder base provides the company with financial and strategic stability and reflects investors' confidence in the company's ability to achieve positive results in the long term.

The company is managed by a board of directors with diverse expertise in industrial and financial sectors, supporting effective governance and prudent leadership of the company's operations. The management is keen to enhance transparency and comply with the regulatory guidelines issued by the Saudi Capital Market Authority.

The Saudi cement sector faces several challenges, primarily the oversupply against a relative slowdown in local demand following the peak of government projects, in addition to competition from local and foreign companies.

The profitability of companies is affected by fluctuations in fuel prices, transportation costs, and regulatory changes in energy policies and government support. Global economic changes may also impact export opportunities and raw material prices.

Despite these challenges, the sector remains supported by state initiatives in housing and infrastructure projects, providing a sustainable demand base. Major companies, including Yamama Cement, are working to enhance operational efficiency, control costs, and seek local and foreign expansion opportunities to address these risks.

Yamama Cement competes with large companies such as Hail Cement (3001), Southern Region Cement (3040), and Arabian Cement (3002), in addition to smaller companies in the sector. Yamama Cement is distinguished by its large market share in the central and northern regions, with the ability to control prices and maintain relatively stable profitability.

Data indicates that the company has maintained high profit levels compared to some competitors, benefiting from effective cost management and improved operational processes. Conversely, the sector is characterized by close profit margins among major companies due to similar cost structures and selling prices.

Yamama Cement's performance remains contingent on sustained local demand and the company's strategies for expansion and efficiency improvement, along with flexibility in dealing with market changes.

Yamama Cement has increasingly focused on sustainability and social responsibility in recent years, having issued its first sustainability report in November 2025. The report highlights the company's efforts to reduce energy consumption, lower emissions, and implement recycling programs.

The company seeks to comply with local and global environmental standards, including ESG (Environmental, Social, Governance) reporting, and works to enhance employee and community engagement in social responsibility initiatives.

The company's initiatives include supporting educational, health, and environmental activities in the areas where it operates, reflecting its commitment to its role as a leading national institution in sustainable development.

The years 2024 and 2025 witnessed several important developments in the trajectory of Yamama Cement Company, including achieving record profits and notable growth in financial performance, announcing its first sustainability report, and approving generous cash distributions.

The company also received notice of adjustments to operational fuel prices and took measures to improve efficiency and mitigate the negative impact on costs. Analytical reports about the company from investment banks and research institutions indicated the company's strength in maintaining its market share and expectations of continued good performance despite some challenges arising from energy prices.

The company continues to explore expansion opportunities by establishing a new factory, focusing on enhancing its competitive and environmental sustainability.