ACPL: Struggling to maintain profitability

April 27, 2021 (MLN): Attock Cement Pakistan Limited (ACPL) has announced the results for nine months period ended March 31, 2020, as per which, the company witnessed a meager decline in net profits by 1.93% to Rs1.99billion compared to the same period last year (SPLY).

This has reflected in the per-share earnings of the company which clocked in at Rs 11.51 against Rs12.14 in SPLY, declined slightly by 5% YoY.

Despite a 16% YoY increase in revenues, the marginal decline in ACPL’s net profit was due to higher operating expenses and financial charges during the period.

During 9MFY21, revenue was increased by 16.14% YoY thanks to higher local mix, higher cement prices and surge in cement dispatches post Covid-19 lockdown. Parallel to sales, the cost of sales also increased by 13.85% YoY.

Accordingly, the gross margins clocked in at 26%, 2ppts higher than the corresponding period last year as lower coal prices and recovery in local retention prices counterbalanced the impact of higher electricity tariff.

Among other heads, the company’s operating expenses soared by 36% YoY from Rs1.98bn to Rs2.6bn, this coupled with a 19.4% YoY plunge in the share of net income of associates put a check on the company’s profitability.

Moreover, the finance cost of the company inclined by 21.8% YoY, this may be attributed to higher short-term borrowings during the period.

On the taxation front, ACPL booked effective taxation at 17% in 9MFY21 against 7% in SPLY.

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