Power Cement suffers loss of Rs 170.7 million during 1QFY21

November 2, 2020 (MLN): Power Cement Limited has disclosed its financial performance for 1QFY21, as per which the company reported net loss of Rs 170.7 million against the profits of Rs 7.9 million earned in the same quarter of last year.

The loss per share of the company clocked in at Rs 0.17 compared to the earnings per share of Rs 0.007 in 1QFY20.

The losses incurred by the company during the quarter were mainly attributable to higher debt burden on account of mark-up expenses accrued on Line III debts.

During the period under review, owing to commencement of new 7700 TPD plant, the production of clinker and cement increased by 508,687 metric tons and 286,115 metric tons respectively increasing the capacity utilization to 95% as compared to 17% of the corresponding period.

The net sales revenue increased by a staggering 459% in line with increase in sales volumes of 574,147 tons as compared to 85,629 during the corresponding period as both local and export markets performed considerably well on the back of enhancement of plant capacity.

As a result, the Gross Margin of the Company stood at 20% as compared to a negative 17% during the corresponding period in line with the increase in sales revenue as well as reduced cost of sales per ton due to the newly installed cost-efficient plant.

As per the company’s quarterly report, the growth in demand of cement during the quarter has been due to recovery of COVID in Pakistan, the construction activities post monsoon and announcement of construction package.

Full effects of construction package are yet to come which is likely to boost the demand of cement in the Country going forward.

During the quarter, overall Cement sector dispatches increased by 22% to 14 million tons from 11 million tons in the same period last year. Domestic dispatches registered a healthy increase of 19%, increasing from 9 million tons to 11 million tons. Exports also showed encouraging growth increasing by 36% from 2 million tons to 2.7 million tons.

Furthermore, Banks in Pakistan are now ready to provide long-term mortgage financing for purchase of houses as the SBP has advised them to build mortgage portfolio up to 5% of their total loans. This will be another factor for creating housing demand resulting in higher demand of cement on sustainable basis, the report said.

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