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PIOC: Lower retentions erode net earnings

February 27, 2020 (MLN): Pioneer Cement Limited (PIOC) has announced its financial results for the half-year ended December 31, 2019, as per which the company has posted a loss of Rs 111 million (LPS: Rs 0.49) against net profits of Rs 526 million (EPS: Rs 2.32) of same period last year.

The main reason for the net losses incurred by the company was a hefty decline in gross level margins.

During the period under review, the topline went down by 18% YoY to Rs 4.14 billion on an account of lower retention price amid intense competition in the local market. This substantial decline in topline shrank the gross margin from 23% to 1% coupled with hike in fuel and power expenses.

On the cost side, the distribution cost jumped by 86.65% YoY whereas other expenses plunged by 100% to stand at Rs 204 thousand.

On the other hand, the other income increased substantially by 8 times YoY to peg at Rs 160 million on an account of outperformance of equity mutual fund investment of the company.

Meanwhile, the finance cost surged by 7.6% YoY to Rs 182 million. However, a tax reversal of Rs 83 million came as a breather in the bottom line.

Financial Results for the half-year ended December 31, 2019 ('000 Rupees)

 

Dec-19

Dec-18

% change

Gross revenue earned from contracts with customers

 

 

 

Cement- Local

 6,858,768

 7,052,695

-2.83%

Cement- Export

 47,146

 234,456

-79.89%

Clinker-Export

 –

 1,243

 

 6,905,914

 7,288,394

-5.25%

Less:

 

 

 

Sales Tax

 (1,173,269)

 (1,145,063)

2.46%

Federal Excise duty

 (1,514,602)

 (1,027,681)

47.38%

Commission

 (39,558)

 (16,964)

133.19%

Discount and rebate

 (30,758)

 (42,001)

-26.77%

 

 (2,758,187)

 (2,231,709)

23.59%

Sales – net

 4,147,727

 5,056,685

-17.98%

Cost of sales

 (4,102,710)

 (3,878,441)

5.78%

Gross profit

 45,017

 1,178,244

-96.18%

Distribution cost

 (161,627)

 (86,595)

86.65%

Administrative expenses

 (57,251)

 (56,706)

0.96%

Other income

 160,990

 18,338

777.90%

Other expenses

 (204)

 (147,046)

-99.86%

 

 (58,092)

 (272,009)

-78.64%

Operating profit

 (13,075)

 906,235

 

Finance cost

 (182,261)

 (169,374)

7.61%

(Loss)/Profit before taxation

 (195,336)

 736,861

Taxation

 83,668

 (209,900)

(Loss)/Profit after taxation

 (111,668)

 526,961

Loss/ Earnings per share –  basic and diluted (Rs.)

 (0.49)

 2.32

 

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Posted on: 2020-02-27T15:03:00+05:00

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