APCL: Profits going south

October 26, 2022 (MLN): Attock Cement Pakistan Limited (ACPL) witnessed a 26.5% YoY decline in its consolidated net profits to Rs275.3 million (EPS: Rs1.54) in first quarter of fiscal year 2022-23, against the net profit of Rs373.32mn (EPS: Rs2.42) earned in the same period last year (SPLY).

Going by the statement issued to PSX, the top line of the company saw an increase of only 15% YoY to Rs6.6bn in sales.

The slender increase in sales is primarily attributable to the massive hikes in retention prices which were countered by a 44% YoY decline in offtake to 335k tons given monsoon rains and flooding across the country, a report by Arif Habib noted.

The gross margins in 1QFY23 settled at 16% compared to 18% in SPLY owed to volumetric decline, jump in coal prices, and higher energy tariff as the plant was shut down for half a quarter so lower usage of waste heat recovery plant added to the woes, and PKR depreciation.

Distribution expenses remained flat at Rs371.26mn, admin costs increased by 35% YoY and financial charges inflated by over 3x YoY to Rs156mn.

Notably, the positive highlight is a 90% YoY increase in other income to Rs81.8mn during the period under review.

On the taxation front, the effective tax rate of the company for the period stands at 17% compared to 18% in the corresponding period last year.

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