FCCL: Lower dispatches, retention price hurt margins

MG News | April 20, 2020 at 03:16 PM GMT+05:00

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April 20, 2020 (MLN): Fauji Cement Company Limited (FCCL) has declared its financial results for the nine months ended March 31, 2020, as per which, the company has witnessed a massive decline in its net profits by around 89% YoY to clock in at Rs 271 million against net profits of Rs 2.44 billion of the corresponding period last fiscal year.

The decline in profitability is mainly attributed to lower dispatches and retention prices as the battle for market shares among players continues in the north.

During the period under review, the topline went down by 14% YoY to Rs 13.48 billion on an account of lower retention price amid intense competition in the north. This substantial decline in topline shrank the gross margin from 26% to 6.51% along with a hike in coal prices.

The other culprit behind the lower bottom line was colossal finance cost which increased by 99% YoY to Rs 149 million on account of short term borrowing and higher interest rate.

FCCL’s basic and diluted earnings per share have been reported at Rs 0.20 per share while those recorded last year were Rs 1.77 per share.

Profit and Loss Account for the nine months ended March 31, 2020 ('000 Rupees)
	Mar-20	Mar-19	% Change
Turnover - net	13,481,638	15,644,101	-13.82%
Cost of Sales	(12,603,718)	(11,537,307)	9.24%
Gross Profit/ (loss)	877,920	4,106,794	-78.62%
Distribution Cost	(151,977)	(144,259)	5.35%
Administrative Expenses	(360,602)	(294,834)	22.31%
Other Operating Expenses	(14,445)	(254,894)	-94.33%
Finance Cost	(149,536)	(75,248)	98.72%
Other Income	74,091	121,283	-38.91%
Profit/(loss) before Taxation	275,451	3,458,842	-92.04%
Taxation	(3,644)	(1,018,568)	-99.64%
Profit/(loss) for the period	271,807	2,440,274	-88.86%
Earnings/(loss) per Share - Basic and Diluted (Rs)	0.20	1.77	-88.70%

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