KARACHI: Fauji Cement Company Limited (FCCL) posted a profit after tax of Rs854 million during the January-March quarter of the ongoing fiscal year, a 28% increase on a year-on-year basis.
Previously, for the same period last year, Fauji Cement posted earnings Rs669 million. Cumulatively, the company’s profit increased to Rs2.122 billion for 9MFY18, up 8% compared to the same period last year.
According to the notification sent to the Pakistan Stock Exchange, the company also announced a dividend of Rs1. Market talk suggested the announcement of the unexpected dividend by Fauji Cement suggests that the company has not finalised expansion plans yet.
According to a AHL Research report, Fauji Cement witnessed stagnant revenues at Rs5.5 billion during 3QFY18. Meanwhile, finance costs remained higher at Rs47 million, showing a sharp rise by four times on a year-on-year basis due to higher borrowing. The effective taxation during the quarter was recorded at 30% against 31% for the same period last year.
According to Sherman Securities, gross margin of the company improved by two percentage points to 24% in 9MFY18 after the commencement of line-II operations of the company from October last year. Fauji Cement line-II was severely damaged in the silo collapsed incident due to which the company had to purchase expensive clinker from other cement manufacturers.
Therefore, the increase in the profits for 3QFY18 is attributed to lower reliance on expensive clinker amid commissioning of plant and commencement of waste heat recovery plant during February 18, which resulted in cost saving.
Published in The Express Tribune, April 18th, 2018.