Corporate results: Kohat Cement’s profit up 11% YoY

Gross margins down 250% due to hike in electricity price.


Our Correspondent October 27, 2014

KARACHI:


Kohat Cement has posted a net profit of Rs683 million in the quarter that ended on September 30, up 11% year-on-year (YoY) compared to Rs616 million during the corresponding period previous year.


Earnings per share (EPS) improved to Rs4.42 compared to an EPS of Rs3.99 in the same quarter last year.

The company earned higher due to better income on cash placements and lower financial charges, Sherman Securities reported on Monday.

During the first quarter of FY15, sales revenue increased by 11% to Rs2.9 billion amid higher cement prices and slight increase in volumetric sales, up 5% YoY. On the other hand, company’s reduced gross margins restricted growth in earnings. The gross margins in the first quarter of FY15 were recorded at 35.5% against 38% last year – down 250%.

The decline in gross margins was caused due to the increase in electricity prices by more than 50%. The quarterly result also announced that the company is in process of installing 15 megawatt Waste Heat Recovery power plant, which is expected to reduce production costs.

The plant is expected to come online by the end of FY15. Being imported from China, it will be able to meet 30% of the company’s requirements. The project will cost Rs2 billion – 80% of which will be financed through debts.

In October last year, Kohat Cement became a subsidiary of ANS Capital as the sponsors had transferred 55% of their holding to the latter.

Published in The Express Tribune, October 28th, 2014.

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