Power Cement's blown up expenses land the company in losses

May 21, 2020 (MLN): Power Cement Limited has unveiled its financial performance today for the nine months period ended on March 31, 2020, as per which the company posted a net loss of Rs 1.75 billion with a loss per share of Rs 1.65 against the profits of Rs 40.77 million (EPS: Rs 0.04) earned in the same period last year.

The losses were attributable to several factors such as hard- bitten competition in the region due to surplus capacities which put adverse pressure on selling prices, axel load regime which has been the major reason for significantly higher costs on input materials as well as lower retentions and the steep rise in fuel, power and packing material costs  which further led company to gross losses.

In addition to this, a significant rise in financial charges by 21x due to higher interest rates and tax payments by 7.9x were also responsible for turning company’s profit into losses.

Going forward, as the government has incentivized the construction sector by legislating a package announced by the Prime Minister to increase the cement consumption in the country in the wake of the coronavirus pandemic is expected to bode well for the cement players if it is implemented effectively.

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