Bestway Cement: Higher finance cost dents bottom line

April 24, 2020 (MLN): Bestway Cement Limited (BWCL) has suffered losses of Rs 19.92 million for the nine months ended March 31, 2020, against net profits of Rs 9.53 billion of the corresponding period last year.

This has translated into a loss per share which clocked in at Rs 0.03 against earnings per share of Rs 16 in the aforementioned period.

The company underwent losses in 9MFY20 due to higher net finance costs.

As per the financial statement issued by the company to PSX, BWCL’s sales revenue was down nearly by 30% YoY on an account of lower retention price which caused gross profit to decrease by 90% YoY to Rs 1.27 billion despite the decline in cost of sales by around 2% YoY.

The company witnessed a decrease in its major expense heads as selling and distribution expenses went down by 41.5% YoY from Rs 1.08 billion to Rs 633 million. Moreover, administrative costs and other charges fell by 26.5% and 98% respectively.

Meanwhile, the company reported finance cost which ballooned by 47% YoY to clock in at Rs 1.65 billion, bringing the bottom line into red. However, a tax reversal of Rs 137 million provided a cushion to its bottom line.

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