Eastern Cement announced its preliminary 4Q11 results on 16 January 2012. All profit lines grew 23-28 per cent Y-o-Y, driven by higher prices and with lower costs.

A key issue for Eastern Cement is that it is already working at a high utilization rate (>95 per cent) and has low inventory levels (80 per cent of one month worth of sales), thus it is difficult for the company to meet any incremental growth in demand.

With a muted demand outlook in the eastern province, alongside a limited capability to meet incremental demand in other parts of Saudi the outlook for Eastern Cement remains poor and the stock is with a PT of SR53.4.