Domestic demand drives Kohat Cement FY12 sales

Pakistan’s Kohat Cement Company Ltd (KOHC) achieved a 26.5 per cent YoY growth in domestic sales during FY12, outperforming the industry which grew 8.8 per cent. Its exports, however, suffered a steep decline of 29.6 per cent YoY to 273,000t, reducing total growth to 12 per cent.

The company achieved a four-year high capacity utilsation rate of 59 per cent, the highest since it started operations of ist expansion project.

It expects volumes to grow at CAGR of four per cent for to 1.9Mt in FY16 from 1.7Mt in FY12 with domestic demand and exports improving at a CAGR of 4.5 and 1.5 per cent rate, respectivey.

KOHC has placed a strong emphasis on deleveraging its balance sheet. Due to losses in FY10, the company has had to reschedule ist long-term debt whereby it increased ist repayment period and deffered its mark-up payments. However, a strong pricing scenario of late has created healthy cash flow generation and the company has prepaid PKR1.1bn of its long-term liabilities in FY12.  This is likely to reduce the company’s debt to capital ratio to 55 per cent in FY12 from 72 per cent in FY11.