Pioneer Cement’s earnings hit by lower margins
MG News | October 03, 2019 at 04:15 PM GMT+05:00
October 03, 2019 (MLN): Pioneer Cement Limited (PIOC) has announced its financial results for the year ended June 30th 2019, wherein the company reported a notable decline in its net profits to Rs 790 million from Rs 1.6 billion earned last year, registering a decline of 52% YoY.
This reflected in Earnings per share which clocked in at Rs 3.48 against Rs 7.24 exhibited last year.
The decline in company’s bottom-line largely came from 6 percent points decline in gross margins and significant surge in finance cost (up by 185% YoY).
The gross margins weakened on the back of hefty PKR devaluation during the period, which increased company’s production cost. While, finance cost surged mainly due to considerable rise in PIOC’s borrowings for upcoming expansion along with significant increase in interest rates during the period.
Moreover, the company also witnessed an increase in its major expense heads such as administrative cost and distribution expenses by 46.6% and 9.27% which further caused company’s profitability to decline.
The Board of Directors of the company did not announce any cash dividend for the period under review.
| Financial Results for the year ended June 30, 2019 ('000 Rupees) | |||
|---|---|---|---|
|
| Jun-19 | Jun-18 | %Change |
| Sales - net | 9,733,653 | 10,121,320 | -3.83% |
| Cost of sales | (7,598,967) | (7,310,647) | 3.94% |
| Gross profit | 2,134,686 | 2,810,673 | -24.05% |
| Distribution cost | (182,383) | (166,913) | 9.27% |
| Administrative expenses | (143,060) | (97,538) | 46.67% |
| Other income | 72,766 | 59,049 | 23.23% |
| Other expenses | (288,071) | (297,690) | -3.23% |
|
| (540,748) | (503,092) | 7.48% |
| Operating profit | 1,593,938 | 2,307,581 | -30.93% |
| Finance cost | (270,704) | (94,896) | 185.26% |
| Profit before taxation | 1,323,234 | 2,212,685 | -40.20% |
| Taxation | (532,857) | (568,665) | -6.30% |
| Profit after taxation | 790,377 | 1,644,020 | -51.92% |
| Earnings per share - basic and diluted (Rs.) | 3.48 | 7.24 | -51.93% |
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