KOHC sees profits rise by over 2x amid impressive margins

MG News | February 17, 2022 at 06:10 PM GMT+05:00

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February 17, 2022 (MLN): Kohat Cement Company Limited (KOHC) has posted robust growth of over 2x YoY in net profits to Rs2.98 billion during 6MFY22, compared to the profits of Rs1.47bn in the corresponding period last year.

This has caused the company’s earnings per share to clock in at Rs14.86 as opposed to Rs7.33 a year earlier.

The remarkable growth in company’s profitability was attributed to better cement retention prices in domestic market, increased domestic contribution in overall dispatches, and increased reliance on domestic/Afghanistan coal. The growth in earnings further supported by other income which went up by 3.7x YoY due to strong liquidity position of the company and interest rate hike in 2QFY22.

The top-line of the company improved by 35% YoY primarily on the back of higher retention prices.

Despite massive jump in coal prices, improved retention prices kept company’s margins elevated at 32% compared to 23% in 1H of FY21.

On the cost front, distribution cost of the company portrayed an increase of 33.5% YoY, whereas, admin cost jumped by 11% YoY. Similarly, other expenses surged by 95% YoY. On the flip side, finance costs decreased by 14%YoY to Rs236.3mn owing to lower borrowings amid higher interest rate regime.

Additionally, the company has booked an effective tax rate of 29% against 28% in 1HFY21.

Profit and Loss Account for the Half Year ended December 31, 2021 (Rupees)
	Dec-21	Dec-20	% Change
Sales - net	15,014,812,440	11,108,015,932	35.17%
Cost of goods sold	(10,271,858,622)	(8,511,478,971)	20.68%
Gross profit/ (loss)	4,742,953,818	2,596,536,961	82.66%
Selling and distribution expenses	(52,073,172)	(39,008,639)	33.49%
Administrative and general expenses	(174,592,908)	(157,044,591)	11.17%
Other operating income	207,921,645	56,385,532	268.75%
Other expenses	(267,283,640)	(137,047,795)	95.03%
	(286,028,075)	(276,715,493)	3.37%
Operating profit/ (loss)	4,456,925,743	2,319,821,468	92.12%
Finance cost	(236,354,353)	(274,074,523)	-13.76%
Profit/ (loss)before taxation	4,220,571,390	2,045,746,945	106.31%
Taxation	(1,236,543,644)	(573,332,635)	115.68%
Profit after taxation	2,984,027,746	1,472,414,310	102.66%
Earnings/(loss) per share - basic and diluted (Rupees)	14.86	7.33	102.73%

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