Pioneer Cement’s earnings drop 41% to Rs417.22m

Earnings per share reduced to Rs1.84 from Rs3.09

KARACHI: Pioneer Cement’s profit dropped 41% to Rs417.22 million in the quarter ended September 30 due to loss on short-term investment in mutual funds and higher cost on several heads, according to a bourse filing on Monday.

The cement manufacturer had booked a profit of Rs702.27 million in the same quarter last year. The earnings per share (EPS) reduced to Rs1.84 from Rs3.09 in the under review period.

Its share price hit the lower limit of 5%, or dropped Rs3.77, to Rs71.69 with a volume of 270,800 shares.



Several brokerage houses said the result was below market expectation. JS Research said in a post-result comment that the company booked losses on its short-term investments to the tune of Rs106 million. “To recall, company had made short-term investments of Rs2.62 billion in various mutual funds (both equity and fixed income) on which it had to book losses amidst a bearish market.

“Breakdown suggests that approximately Rs1.48 billion worth of amount was invested in mutual funds, which had direct or indirect exposure to equities. This remained the key reason behind low earnings for the quarter.”

MBA Capital said the net sales of the company shrunk 3% year-on-year owing to 5% decline in sales volumes to 0.38 million tons (including 45,000 tons of clinker made during Aug-Sep’17) amid pricing pressure prevailing in the industry during the quarter.



Cost of goods sold increased significantly by 12% year-on-year, attributable to 29% increase in coal prices and 9% increase in grid tariff during the quarter, it said.

Finance cost increased to Rs19.74 million from Rs1.13 million.

Published in The Express Tribune, October 24^th, 2017.

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