October 1, 2019 (MLN): Attock Cement Pakistan Limited (ACPL) held its corporate briefing session yesterday, wherein the management of the company discussed the financial performance in FY19, along with the future outlook.
To recall, the company announced its financial results on July 29, 2019, wherein the Directors of the company announced a Profit after Tax (PAT) figure of Rs. 2.07 billion, which was nearly half of PAT reported in last year.
Explaining the factors responsible for the above-mentioned results, the management of the company said that the major decline in profitability came due to significant reduction in margins. In addition, pricing pressure in domestic market and stiff competition in exports along with increase in input costs were also the major reasons in dragging company’s profits.
The sales of the company in southern regions was affected by axle load condition while dumping in northern region also slightly affected the local sales by 5% YoY.
The management of the company is of the view that Axle load implementation is adversely impacting the sector, as it resulted in increase in transportation cost along with rise in turnaround time for loading and unloading of trucks.
Going forward, the management expects cement demand to remain under pressure until the economy passes through the low growth period. Furthermore, seasonal impact due to extended monsoon, CNIC requirement and lack of project initiated in Karachi are also likely to hamper local demand.
On external front, the management apprised that ACPL is exporting cement to cover its fixed cost and Sri Lanka, Bangladesh and East African countries are the main destinations for the company for cement exports.
Shedding the light on upcoming projects like Naya Pakistan housing Scheme and construction of dams, the management were of the view that in the current scenario, these projects look unrealistic due to fiscal constraints, moreover, the demand emanating from these projects is not expected to realize in the next 12-24 months due to complexities related to formulation of a comprehensive framework.
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