KARACHI: Cherat Cement Company announced a net profit of Rs1.96 billion in fiscal year ended June 30, 2017, up 39% compared to Rs1.41 billion in the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) jumped to Rs11.08 in FY17 compared to Rs7.96 in the preceding year.
Along with the result, the company announced a cash dividend of Rs3.5 per share, taking cumulative pay-out to Rs4.5 per share in the year.
During FY17, its revenue increased 36% year-on-year (YoY) to Rs9.6 billion due to higher cement dispatches, estimated at 1.47 million tons, up 42% YoY, as a result of commencement of a new production line. However, exports declined 7% YoY while local dispatches increased 55% YoY.
Moreover, the company recorded a lower effective tax rate of 22% in FY17 compared to 32% in fiscal year 2016. The lower taxation was due to tax benefit on the company’s new plant. In the fourth quarter of FY17 alone, earnings came in at Rs390 million (EPS Rs2.2), down 28% quarter-on-quarter.
This decline in earnings is largely due to lower gross margins at 24% compared to 32% in the preceding quarter, according to a Sherman Securities’ report.
The report stated that FY17 was likely to be a disappointing year for cement manufacturers as cost pressure limited revenue growth despite the fact that dispatches and capacity utilisation remained on the higher side.
Published in The Express Tribune, August 24th, 2017.