Fauji Cement Company Limited (FCCL) boosted its net earnings by more than a half to PKR4bn (US$39m) in FY15, the company’s financial results revealed on Tuesday.

Higher margins coupled with a decline in finance cost helped the company earn an after-tax profit of PKR4.1bn or PKR2.9/share in FY15, up 56.7 per cent compared to PKR2.6bn or PKR1.8/share of the last fiscal year.

The Rawalpindi-based cement manufacturer also approved a final cash dividend of PKR1.5 per share, taking the total pay-out for the year to PKR2.5/share. The result was above market expectations, according to Taurus Securities Head of Research, Zeeshan Afzal.

Amid profit taking, the stock declined one per cent from 36.4 per share of the previous day to settle at PKR36.05/share at the close of business on Tuesday as 12.5m shares were traded in the day, its highest volume since 8 July 2015.

The company’s revenues for the year under review stood at PKR18.6bn, up 6.3 per cent compared to PKR17.5bn it grossed in the corresponding year.

“The growth in earnings was led by expansion in its margins, which increased by 300 basis points and a 32 per cent decline in its finance cost,” BMA Capital said in its report. Effective tax rate of 28 per cent in FY15 – lower compared to 42 per cent of FY14 – also contributed to the growth, it said.

Global Securities attributed growth in the company’s margins to decline in coal prices and power costs.
On a sequential basis, the report said, FCCL’s profits surged by 133 per cent to PKR1.4bn or PKR0.92/ share in quarter ending on 30 June 2015. This growth mainly emanated from activation of waste heat recovery plant along with a surprising decrease in taxation, it said.