PIOC: Lower retentions erode net earnings
By MG News | February 27, 2020 at 03:03 PM GMT+05:00
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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