Suez Cement, Egypt's largest listed cement maker by market value, said profits rose sharply in the third quarter though an energy shortage had raised costs and marred its outlook.

Net profits after minority interests rose 40.5 per cent to E£52 million ($7.3 million) after it managed to pass on higher production costs to customers.

But nine-month profits fell 14.6 per cent on last year, hit by severe energy shortages which forced the company to cut output by 40 percent so far this year.

"Power cuts and fuel shortages are likely to remain major issues for cement producers. Fuel and energy shortages will prolong challenges to meeting cement production targets," it said in a statement.

Suez Cement was one of the companies affected when the government cut natural gas supplies to factories in January and has had to import clinker at higher cost.

The move was aimed at preserving natural gas for power generation, to avoid blackouts and public unrest. It led cement companies, including Suez, to renew a demand to use coal for power generation.

The cabinet approved the industrial use of coal in April and companies are now in the process of fitting their plants to run on imported coal, a move Suez said should help boost its output and reduce costs.

Suez Cement said it would begin using coal during the next two years while working to diversify its energy mix by adding waste-derived fuel in its factories.

It began testing coal use at its Kattameya plant in September and will begin testing at its Suez plant by year-end.

The company has five plants in Egypt. - Reuters