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Fauji Cement earns higher profit in 9MFY24 despite expansion costs

Fauji Cement earns higher profit in 9MFY24 despite expansion costs
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April 23, 2024 (MLN): Fauji Cement Company Limited (PSX: FCCL) has earned a profit after tax of Rs7.04 billion [EPS: Rs2.87] in the nine months of FY24, as compared to a profit of Rs6.97bn [EPS: Rs2.84] in the same period last year (SPLY).

This comes despite increased financial cost incurred on expansion related debt during period under review.

Going by the results made available by the company, sales revenue marked an increase of 14.4% YoY to Rs59.4bn as compared to Rs51.91bn in SPLY.

Domestic sales showed a decline of 4% while export sales increased by 68% mainly attributable to sea exports, which have again become viable due to currency devaluation and lower imported coal prices for the companies in the South.

Industry dispatches for the nine months of FY24 were 34.5 million tons as compared to 33.6m tons in SPLY; an increase of 3% YoY.

Company's dispatches during the nine months FY24 were 3.79m tons as compared to 3.76m tons SPLY; an increase of 1% YoY.

The gross margins improved to 30.66% as compared to 27.09% in SPLY.

This, mainly, is attributable to better sales prices and cost optimization initiatives taken by the Management.

As a result of higher exports and devaluation of PKR, the company was able to get better revenue from exports.

On cost side, increased usage of local coal, initiative to use multiple types of alternative fuels, increase in own power generation to mitigate the 35% increase in power tariffs and optimization of fixed costs contributed towards achieving the overall results.

The company observed a fall in administrative expenses by 0.7% YoY and other expenses by 8.3% YoY to clock in at Rs1.13bn and Rs580.52m respectively during the review period.

On the other hand, the company saw its selling and distribution expenses surge 6x to Rs2.56bn.

During the period under review, other income down by 8.0% YoY to stand at Rs571.29m in 9MFY24 as compared to Rs620.86m in SPLY.

The company’s finance cost inflated by 50.3% YoY and stood at Rs3.77bn as compared to Rs2.51bn in SPLY, mainly due to expansion related debt and higher interest rates.

On the tax front, the company paid a higher tax worth Rs3.7bn against the Rs3.01bn paid in the corresponding period of last year, depicting a rise of 22.9% YoY.

Unconsolidated (un-audited) Financial Results for nine months ended March 31, 2024 (Rupees in '000)
  Mar 24 Mar 23 % Change
Sales 59,400,121 51,907,364 14.43%
Cost of sales (41,190,185) (37,847,848) 8.83%
Gross Profit 18,209,936 14,059,516 29.52%
Administrative Expenses (1,127,488) (1,134,827) -0.65%
Selling And Distribution Expenses (2,557,575) (422,707) 505.05%
Other Income 571,291 620,864 -7.98%
Other Operating Expenses (580,523) (632,693) -8.25%
Finance Cost (3,772,323) (2,509,963) 50.29%
Profit before taxation 10,743,318 9,977,877 7.67%
Taxation (3,700,803) (3,010,138) 22.94%
Net profit for the period 7,042,515 6,967,739 1.07%
Basic earnings/ (loss) per share 2.87 2.84

Amount in thousand except for EPS

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Posted on: 2024-04-23T12:52:33+05:00