Pakistan producer Fauji Cement Company Ltd (FCCL) reported a 54 per cent drop in net profit for the first nine months of the current fiscal to PKR1.972bn (US$18.8m).
Nabeel Khursheed, analyst at Topline Securities, said gross margins were down considerably to 21 per cent due to the purchase of raw material at higher prices. “FCCL procured clinker from other cement players due to the non-functioning of its Line 2 as a result of a silo incident. The company is also running the plant on expensive furnace oil in place of coal,” The International News (Pakistan) quoted him as saying.
For the nine-month period, FFCL’s sales revenue stood at PKR15.759bn compared with PKR15.195bn a year earlier.
For the quarter ended 30 March 2017, FCCL posted a net profit of PKR669.066m compared with the profit of PKR1.56bn in the corresponding quarter of last year.
Mr Khursheed flagged delays in the completion of rehabilitation works and the start-up of Line 2, the continuous decline of exports to Afghanistan, pricing competition, unanticipated increases in coal prices and a slowdown in construction activities as key risks for FCCL.
