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.

Profit and Loss Account for the nine months ended March 31, 2020 ('000 Rupees)

 

Mar-20

Mar-19

% Change

Sales – net

 2,647,281

 3,051,100

-13.24%

Cost of sales

 (2,790,311)

 (2,739,131)

1.87%

Gross (loss) / profit

 (143,030)

 311,969

 

Selling and distribution expenses

 (136,870)

 (94,295)

45.15%

Administrative expenses

 (137,368)

 (109,322)

25.65%

Impairment loss on trade debts

 –  

 –  

 

Other income

 77,046

 524

14603.44%

Other operating income/expenses

 (242,753)

 (70,870)

242.53%

Operating Profit/loss

 (582,975)

 38,006

 

Finance Income

 10,941

 17,158

 

Finance cost

 (1,915,244)

 (107,687)

 

Finance costs – net

 (1,904,303)

 (90,529)

2003.53%

Loss before taxation

 (2,487,278)

 (52,523)

4635.60%

Taxation

 736,785

 93,298

689.71%

Profit after taxation

 (1,750,493)

 40,775

 

Earnings per share – basic and diluted (Rupees)

 (1.650)

 0.04

 

 

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Posted on: 2020-05-21T15:45:00+05:00

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