PIOC: Out of the woods amid phenomenal sales

September 29, 2021 (MLN): Pioneer Cement Limited (PIOC) has wrapped up the fiscal year 2021 witnessing a notable turnaround in earnings.

As per the financial statement sent to PSX, the company posted net profit of Rs1.97 billion (EPS: Rs8.69) for FY21, against losses of Rs209.62 million (LPS: Rs0.92) incurred during FY20.

The phenomenal performance over the period can be attributed to better cement retention prices, increase in dispatches, and decline in energy cost per bag due to commissioning of coal-based CPP, a report by Foundation Securities said.

As a result of the declining infection rate of Covid-19, and PSDP disbursement, the activities pertaining to the construction industry jolted the demand for cement despatches in recent months.

Given this, the company’s topline staged outstanding numbers during FY21 as the revenue grew by 3.47x to clocked in at Rs24.82bn, compared to 6.29bn in FY20, which has turned gross losses of Pioneer into profit.

Last year, the company capitalized revenue related to a new project and thus revenue figures are incomparable, a report by Sherman Securities highlighted.

On a broader spectrum, the cement sector posted a growth of 22.77% in the month of August 2021 alone. Total Cement despatches during August 2021 were 4.336 million tons (MTs) against 3.531 MTs despatched during the same month of last fiscal year.

The finance cost of Pioneer jumped by 4.6x to stand at Rs1.82bn despite the lower interest rate regime in FY21. The increase in finance cost was primarily due to the company’s debt level. Meanwhile, the company successfully managed to reduce distribution costs by 53%.  

On the taxation front, the company paid Rs228.59mn in FY21, compared to the tax credit worth Rs545.76mn enjoyed in FY20.

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