Fauji Cement’s earnings clock in at Rs4 billion

Revenues amounted to Rs18.6b, up 6.3%.

KARACHI: Higher margins coupled with a decline in finance cost helped Fauji Cement Company Limited (FCCL) boost its net earnings by more than a half to Rs4 billion in fiscal year (FY) 2015, the company’s financial results revealed on Tuesday.

A subsidiary of Fauji Group, the Rawalpindi-based cement manufacturer earned an after-tax profit of Rs4.1 billion or Rs2.9 per share in FY2015, up 56.7% compared to Rs2.6 billion or Rs1.8 per share of the last fiscal year.

The company also approved a final cash dividend of Rs1.5 per share, taking the total pay-out for the year to Rs2.5 per share.

The result was above market expectations, according to Taurus Securities Head of Research Zeeshan Afzal.

Amid profit taking, the stock declined 1% from 36.4 per share of the previous day to settle at Rs36.05 per share at the close of business on Tuesday as 12.5 million shares were traded in the day, its highest volumes since July 8, 2015.

The company’s revenues for the year under review clocked in at Rs18.6 billion, up 6.3% compared to Rs17.5 billion it grossed in the corresponding year.

“The growth in earnings was led by expansion in its margins, which increased by 300 basis points and a 32% decline in its finance cost,” BMA Capital said in its report. Effective tax rate of 28% in FY15 - lower compared to 42% of FY14 - also contributed to the growth, it said.

Global Securities attributed growth in the company’s margins to decline in coal prices and power costs.

On a sequential basis, the report said, FCCL’s profits surged by 133% to Rs1.4 billion or Rs0.92 per share in quarter ending on June 30, 2015.

This growth mainly emanated from activation of Waste Heat Recovery Plant along with a surprising decrease in taxation, it said.

Published in The Express Tribune, September 2^nd,  2015.

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