Cherat Cement’s FY18 profit increases by 9%

Cherat Cement Co Ltd (CHCC) of Pakistan earned a net profit of PKR2.13bn (US$17.3m) in FY18, up by nine per cent YoY, as compared to PKR1.96bn in the same period last year.

Net sales grew substantially by 49 per cent YoY to PKR14.39bn largely driven by full year operations of production line II, inaugurated in January 2017. This was despite the industry's failure to pass over enhanced FED, up by 25 per cent YoY during the year due to intense competition therein, an analyst observed.

The effective tax rate of the company for the year stood at 0.7 per cent as against 22 per cent reported in FY17. This is largely driven by a five-year tax holiday available on sales made from production line II and likely positive deferred tax implications, resulting from reduced corporate tax rates as prescribed by the Finance Act 2018-19.

The company incurred a distribution cost of PKR337m against PKR279m incurred in the same period last year. The administrative expenses increased to PKR245m from PKR225m.
 
The company's installed cement capacity has now reached around 2.4Mta. CHCC is in the process of installing cement line III at the same location with an installed cement capacity of more than 2.1Mta, which is expected to be commissioned by June 2019.