Mixed 1HFY17 results for Pakistani cement producers
The latest series of business results of Pakistani cement producers show a mixed performance during the first half of the 2017 financial year.
DG Khan Cement Company
DG Khan Cement Company Ltd (DGKC) has announced its 1HFY17 financial result. It reported a profit after tax (PAT) of PKR4.506bn (US$42.9m) during 1HFY17 against a PAT of PKR4.080bn during 1HFY16, up 10 per cent, YoY. In line with trends, DGKC did not declare any dividend along with its 1HFY17 results.
The company's total dispatches stood at 2.20Mt in 1HFY17 from 2Mt in corresponding period last year, up by 10 per cent on YoY basis. The figure includes local dispatches of 1.88Mt and export dispatches of 318,000t. This translates a growth of 11 per cent and two per cent in local and export dispatches, respectively. Sales increased by eight per cent to PKR14.68bn during this period.
DG Khan incurred administrative expenses of PKR261.32m, and selling and distribution expenses of PKR504.70m compared to PKR242.25m and PKR385.99m, respectively in 1HFY16.
Maple Leaf Cement
Maple Leaf Cement (MLCF) has reported a profit after tax (PAT) of PKR2.694bn (US$27.7m) during 1HFY17, against a PAT of PKR2.342bn during 1HFY16, up 15 per cent YoY.
MLCF total dispatches stood at 1.62Mt compared to 1.55Mt in 1HFY16, up by four per cent. However, out of these figures, local dispatch increased by eight per cent but, export down by 10 per cent. A local brokerage house attributed fall in export to shrinking demand from Afghanistan following withdrawal of NATO troops, and increased competition from relatively cheaper Iranian cement coupled with declining export prices.
The company sales have increased by 10 per cent to PKR11, 970bn from PKR10,860bn in 1HFY16. The company incurred a distribution cost of PKR682.24m and administrative expenses of PKR278.46m in 1HFY17, compared to PKR 647.28m and PKR 239.34m respectively in year-ago period.
Fauji Cement
Fauji Cement Company Ltd (FCCL) has reported a profit after tax (PAT) of PKR1.303bn (US$12.43m) during 1HFY17 against a PAT of PKR2777m during 1HFY16, down 53 per cent, YoY.
During 1HFY17 FCCL reported a two per cent YoY growth in its sale to PKR10.187bn. The company's local dispatches were up four per cent but export dispatches, down by 48 per cent. The cement producer incurred a distribution cost of PK75.42m and administrative expenses of PKR 167.13m in 1HFY17, compared to PKR 94.45m and PKR 150.29m respectively in year ago period.
A local research house attributed fall in profit due to purchase of clinker by Fauji from other cement plants for mixing along with 3700tpd clinker being produced by FCCL’s own Line 1 to keep its market share intact following the accident of 29 May 2016, whereby the CF silo of Line 2 collapsed coupled with rising international coal prices, hence higher fuel costs mitigated by surge in ‘net retention’ due to rising domestic sales.
Thatta Cement
The company has reported a PAT of PKR389.77m (US$3.7m) in 1HFY17 compared to PKR299.82m in 1HFY16, up by 30 per cent on YoY basis. Its net sale stood at PKR 1.76bn during this period against PKR1.17bn in 1HFY16. Thatta Cement incurred selling and distribution cost of PKR45.49m and administrative expenses of PKR67.94m in 1HFY17, compared to PKR 28.44m and PKR53.3m, respectively in the year-ago period.
