Trade Chronicle Sep-Oct 2015

TRADE CHRONICLE
FCCL earnings at
Rs.1.5 billion
Cement Industry
Lucky Cement profit rises to Rs12.43bn
Fauji Cement (FCCL) announced
4Q2015 earnings of Rs.1.5 billion
(EPS Rs1.1) as against Rs.631 million
(EPS Rs0.5) in the same quarter last
year. This result was well above the
market estimates. The result also
accompanied an interim cash
dividend of Rs.1.5 per share (FY15
dividend Rs.2.5 per share).
In 4QFY15, FCCL recorded
revenues of Rs.5.2 billion, up 5
percent year on year YoY, mainly on
the back of higher net retention price.
Gross profit margin improved
substantially by 658bps to 42.7 percent
in 4QFY15. Impressive GP margin
was due to strong local cement prices,
lower international coal prices, relief
in power tariff by Rs2-2.5/kwh from
Jan 2015 bills and savings from newly
installed Waste Heat Recovery (WHR)
plant, said Nabeel Khursheed, analyst
at Topline Research.
Financial charges during 4QFY15
declined considerably by 50 percent
YoY to Rs.123million, thanks to swift
deleveraging, stable rupee to dollar
parity (foreign currency denominated
loan of $43.8 million or 80 percent of
long-term financing as of June 2014)
and cut in policy rate to 7 percent.
Lucky Cement Ltd’s net profit rose
by 9.6 per cent to Rs12.43 billion
for the year ended June 30, 2015
from Rs11.34bn a year earlier.
Earnings per
share (eps)
increased to
Rs38.44 from
Rs35.08.
Net sales
grew 3.9pc to
Rs44.76bn
from Rs43.08bn, mainly because of
rise in volume, the company said.
The local sales increased 7pc to 4.42
million tonnes from 4.13m tonnes,
but exports decreased 4.5pc to
2.37m tonnes from 2.48m tonnes.
The board proposed final cash
dividend of Rs9 per share.
On a consolidated basis, the
company reported net profit of
Rs13.757bn for the year under
review, 15.68pc higher compared to
last year. Consequently,
consolidated eps increased to
Rs42.54 from Rs36.78 last year.
In a press statement released on
Tuesday, the company reported
progress on its key foreign and local
projects, including fully integrated
cement manufacturing plant in
Congo, and a 660MW coal-based
p o w e r
project,
among
others.
Analysts
said the
company
results
were in line with market
expectations.
The consolidated 4QFY15 earnings
amounted to Rs3.5bn (eps Rs10.7),
up by 4.9pc as against Rs3.3bn (eps
Rs10.2) in the same quarter last
year.
Bottom-line growth in 4QFY15 was
restricted to 4.9pc, mainly on the
back of higher effective tax rate (up
by 872bps year-on-year to 27.4pc)
as a result of one-time super tax.
However, profit before tax
increased by 16.7pc year-on-year
to Rs5.1bn due to improvement in
gross profit margin and decline in
financial charges.
DGKC earns Rs7.63bn
DG Khan Cement (DGKC) posted
net earnings for the FY15 at Rs7.63
billion, translating into earning per
share (eps) at Rs17.40, representing
growth of 28 per cent from
Rs5.97bn (EPS: Rs13.62) in fiscal
year 2014.
In the fourth quarter of fiscal year
2015 alone, earnings increased by
14pc quarter on quarter to Rs5.14 per
share.
Analysts at AKD Securities observed
that the key reasons for earnings
performance were improvement of
80bps YoY in gross margins, which
settled at 42.4pc during fourth
quarter of fiscal year 2015 fueled
by falling coal prices; reduction in
administrative and selling expenses
by 38pc YoY.
An 18pcYoY decline in borrowing
costs due to lower interest rates and
deleveraging of balance sheet.
Trade Chronicle - September - October 2015 - Page # 25