Egypt’s Suez Cement said in a bourse filing that it had to take difficult decisions to reduce costs, including but not limited to reducing the group’s employee headcount by almost 60 percent during the past three years.

Suez Cement said that the Egyptian cement market is “still facing the most significant problems in its history, as a result of huge oversupply, with total production capacity almost reaching double the local demand volumes, noting that export is not a solution.”

“Thus, leading selling prices to drop to levels that doesn’t cover all costs, resulting in sever drop in profitability for the whole sector,” the company added.

Suez Cement added that another decision to help reduce its costs was to close the Tourah Plant.

The company recorded a consolidated Q2 2019 net loss of 332.1 million Egyptian pounds, from a profit of 77.7 million Egyptian pounds in Q2 2018. Suez Cement’s sales dropped 17.93 percent to 1.51 billion Egyptian pounds in Q2 2019, from 1.84 billion Egyptian pounds in Q2 2018.

“Currently, the company continues to explore possible alternatives and expected profits from selling its land banks,” Suez Cement’s statement added.

The company’s shares were trading 3.44 percent higher on Wednesday by 13:57 GST but have dropped 34 percent so far since the start of the year 2019.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(Gerard.aoun@refinitiv.com)

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