TC Sep-Oct 2022 Issue

TRADE CHRONICLE Sep - Oct - 2022
Flying to install 21MW
power plant for under
construction Line 2
Company Secretary of Flying Cement
Company Limited (FLYING) Shahid
Ahmad Awan has informed Pakistan
Stock Exchange (PSX) that the Board
of Directors of the Company, in their
meeting on October 03, discussed the
installation of 21 MW captive power
plants to meet the power requirement
of Line 2 at Lilla, in Punjab Province
of Pakistan. The Company has already
obtained NOC for its installation
from the Government of Punjab
Environmental Protection Agency.
According to Company's 3rd quarter
report (Jan –March 2022), Flying is
fully committed to completing its Line
2 expansion
project,
after which
a significant
rise in
profitability
a n d
financial ratios is expected to maximize
shareholder return. It is estimated that
the Company shall achieve its COD
later this year, after which the annual
cement production capacity will rise
from 1.197Mt to 3.510Mta.
Flying Cement's profit increased
during FY21-22
Meanwhile, Flying Cement Company
has reported that its profit after
taxation for FY 22 comes to PKR 924m
from a profit of PKR 143.6m earned
in the corresponding period last year.
The major increase in yield can be
attributed to higher net sales of PKR
53.36bn from PKR 32.05bn in the same
period the previous year.
The Company incurred higher
administrative expenses of PKR
75.9m against PKR 53.8m and higher
distribution expenses of PKR 14.5m
as opposed to PKR 10.7m in the same
period last year. The financial cost has
ballooned to PKR 115m from PKR 71m
during the comparative accounting
period.
Courtesy - CemNet
Pakistan cement industry
aftermath of floods
Sindh Chief Minister Murad Ali
Shah has stated that the provincial
government would start building
homes and other civil infrastructures
for flood affectees as soon the water is
receded in Sindh Province. The other
provinces will follow in their footsteps.
Furthermore, Pakistan’s top cement
manufacturers expect demands for
cement likely to pick up in 3-6 months
in the country as soon as the water
recedes and rehabilitating works are
started under aid from various foreign
countries and government allocation.
The federal government has already
shifted some funds from Public Sector
Development Programme to flood
affectees.
The recent floods have severely
impacted Pakistan, leading to massive
damage to the country’s physical
infrastructure, including homes, roads,
bridges, crops, etc. As per National
Disaster Management Authority
(NDMA), a cumulative loss of 1.76m
houses (Partially and Fully Damaged),
390 Bridges and Roads (distance of
12,718km) has already taken place till
Sep 14, 2022.
Topline Research surveyed Pakistan’s
Kohat Cement's profit increased
by 43.66 percent in FY21-22
Pakistan cement producer – Kohat
Cement Company Limited (KOHC) has
announced an increase of 43.66 per
cent in its profit on a YoY basis during
its financial results for the year ended
June 30, 2022.
It reported a profit after tax of PKR
5.024bn compared to PKR 3.497bn
earned in the year's corresponding
period. The major factor responsible
for the increase in profit was growth in
sales.
leading cement manufacturers to
understand better the situation and
sector’s outlook after the floods.
These manufacturers cumulatively
represent 76 per cent of the total
industry size in terms of plant capacity.
The Research house outlook expects
a fall in cement dispatches in FY23.
It anticipates cement dispatches to
decline by 12 per cent in FY23, followed
by an increase of 11 per cent in FY24,
as the reconstruction of infrastructure
will result in increased demand for the
sector, especially when Federal and
Provincial governments will increase
spending in an election year. However,
cement prices remain flat during FY23
from the current levels as it would be
tough for manufacturers to increase
costs further, given the existing
economic environment.
Still, there are concerns about
planned capacities which could again
cause pressure on cement pricing.
But the Research house believes
that the planned capacities could
face delays, especially in greenfield
projects where the central bank had
imposed restrictions on the import
of machinery. Thus, the scheduled
capacities expected in FY23 and FY24
could be delayed to FY24 and FY25.
Courtesy - CemNet
IMS Research has added that
KOHC has posted impressive
gross margin and operating
profitability in 4Q (April – June
2022), majorly attributed to elevated
retention prices and better inventory
management.
According to a Company notification
to the Pakistan Stock Exchange (PSX)
on September 24, 2022. Its sales
increased 36,67 per cent to PKR
32.876bn from PKR 24.057bn during
this period. However, it incurred a
distribution cost of PKR 122m against
PKR 94m. The administrative and
general expenses stood at PKR353m
compared to PKR 313m in the year's
corresponding period.
The Company's Board of Directors
announced no dividend and bonus
shares on September 24, 2022.
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