MUSCAT, MARCH 6
Financially-troubled cement manufacturer Raysut Cement – the largest cement producer in the Sultanate of Oman - has dramatically pared its net losses for 2023 to RO 5.079 million, down from an unprecedented RO 97.634 million a year earlier.
The Salalah-based company is currently governed by an interim board of directors instituted by the Capital Market Authority (CMA). That action followed the discovery of financial anomalies that threatened to destabilize the publicly listed company.
“Raysut Cement Company and its subsidiaries demonstrated enhanced performance when compared to the prior year,” said Hamdan Ahmed al Shaqsi, Chairman of the Board of Directors, set up by the market regulator to help turnaround the financially-beleaguered company.
“During the financial year 2023, the company effectively managed its costs through optimization measures, resulting in operating profit compared to the loss reported in the previous year 2022,” he stated in the Directors’ Report for the financial year ended December 31, 2023.
Raysut Cement Group owns and operates a string of subsidiaries and associate companies that together ensure an expansive market presence encompassing the Gulf, Yemen and East African regions. While parent company Raysut Cement covers markets in Dhofar, Yemen and East Africa, Sohar Cement has its focus on northern Oman. UAE-based Pioneer Cement, a wholly-owned subsidiary, caters to both the Oman and UAE markets.
Through its associate firm Mukalla Raysut Trading & Industrial Company, the Group targets the Yemeni market. Coverage of the Indian Ocean island of Maldives is handled by another subsidiary, Raysut Maldives Cement Pvt Ltd.
Cement production across the Group totaled around 3.090 million tonnes in 2023, which was marginally lower than the previous year’s tally of 3.160 million tonnes. However, production of clinker – an essential component of cement manufacturing – climbed to 3.144 million tonnes, up from 3.004 million tonnes in 2022.
Total revenue across the Group dipped to RO 65.54 million in 2023 versus RO 69.07 million a year earlier. Operating profit improved to RO 2.45 million against an operating loss of RO 41.85 million in 2022.
Board Chairman Hamdan al Shaqsi added: “The Group aims to achieve optimum capacity utilization in all the plants while continuing with the cost reduction initiatives and focusing on increasing the sales revenue. The steps taken towards setting strategic direction, improving the internal control system and strengthening corporate governance system and competency in human resources are also progressing as planned.”
In December 2022, the market regulator invoked its powers under the Commercial Companies Law and the Securities Law to dissolve the existing Board of Directors. It cited in this regard the Group’s failure to suitably address concerns over “material misrepresentations” uncovered in Raysut Cement financial reporting for Q2 2022. The Authority instituted a new ‘temporary board’ with a mandate to restore the company’s organizational and operational stability and thereafter to also address all of the shortcomings that led to its financial upheaval.
Last October, the CMA announced that a criminal case brought against certain senior representatives of Raysut Cement had been referred to the competent court for trial. It follows an investigation spearheaded by the Authority that uncovered “suspected financial and administration violations” at Raysut Cement.
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