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Bestway Cement announces 60% DPS despite 16% YoY profit drop in 1HFY24

Bestway Cement’s profits dip slightly in 3QFY24
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February 21, 2024 (MLN): Bestway Cement Limited (PSX: BWCL) earnings in 2023 clocked in at Rs6.78 billion [EPS: Rs11.38], down by 15.99% YoY compared to a profit of Rs8.07bn [EPS: Rs13.53] recorded in the same period last year (SPLY).

Despite this profitability drop, the company has announced an interim cash dividend for the quarter ended December 31, 2023, of Rs6 per share i.e. 60%.

Going by the results, the company's net revenue grew 28.33% YoY to Rs54.86bn as compared to Rs42.75bn in SPLY.

The cost of sales also increased by 36.09% to Rs39.11bn in 2023. However, as the growth in sales was significantly higher, the gross profit of the company improved by 12.4% YoY to Rs15.75bn.

On the expense side, the company observed a rise in Selling and distribution expenses by 29.42% YoY and other expenses by 24.43% YoY to clock in at Rs609.64m and Rs565.8m respectively during the review period.

Meanwhile, the increase in administrative expenses was recorded at 7.6% YoY as a figure of Rs757.33m was reported in the profit and loss statement.

During the review period, other income of BWCL surged by 3.16x YoY to stand at Rs458.41m in 1HFY24 as compared to Rs144.95m in SPLY.

It is crucial to mention here that the company's earnings were mainly supported by inflows from associates, amounting to Rs2.21bn in 2023, marking a 44.85% YoY increase compared to 2022.

The company’s finance costs also soared by 2.73x YoY and stood at Rs5.7bn as compared to Rs2.09bn in 1HFY23, mainly due to higher interest rates and the primary reason for the drop in profit

On the tax front, the company paid a lower tax worth Rs4.01bn against the Rs3.6bn paid in the corresponding period of last year, depicting a decrease of 11.37% YoY.

Condensed Interim Financial Results for half year ended 31 December 2023 (Rupees in '000)
  Dec 23 Dec 22 % Change
Net Revenue 54,864,447 42,753,965 28.33%
Cost of sales (39,113,974) (28,740,731) 36.09%
Gross Profit 15,750,473 14,013,234 12.40%
Selling and distribution expenses (609,643) (471,065) 29.42%
Administrative expenses (757,326) (703,807) 7.60%
Share of net profit / (loss) of an Associate 2,210,175 1,525,785 44.85%
Other Income 458,413 144,945 216.27%
Other expenses (565,795) (748,675) -24.43%
Finance cost (5,696,683) (2,088,760) 172.73%
Profit before taxation 10,789,614 11,671,657 -7.56%
Taxation (4,006,104) (3,597,034) 11.37%
Net profit for the period 6,783,510 8,074,623 -15.99%
Basic earnings/ (loss) per share  11.38 13.53

Amount in thousand except for EPS

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Posted on: 2024-02-21T15:48:14+05:00