Attock Cement’s profit dips 18% as energy cost bites

Higher coal prices meant earnings were subdued during July-March

KARACHI: Attock Cement’s profit decreased 18% to Rs1.83 billion during July-March period of the ongoing fiscal year, compared with Rs2.23 billion during the nine-month period of the previous year.

According to a notification sent to the Pakistan Stock Exchange (PSX), the company’s revenue increased by 8% for the nine-month period, but rising cost of energy due to an increase in coal prices affected the bottom-line.

“Dispatches increased by 8% for the period, however, energy cost for the production of cement also increased considerably as coal prices surged by 37% on year-on-year basis. That eroded the bottom line for the company,” Saqib Hussain of Sherman Securities told The Express Tribune.

Accordingly, the company’s earnings per share (EPS) amounted to Rs15.95, compared with EPS of Rs19.54 during the same period last year. However, the result was in line with market expectations.

Revenue of the company increased to Rs12.1 billion mainly due to higher cement dispatches. Local dispatches grew by 15%, while exports declined by 2%.

Gross margin of the company clocked in at 32.8% against 40.7% of 9MFY17. The rise in coal price has been attributed to the reason behind lower gross margins.

Meanwhile, other income of the company declined considerably by 65%. This decline has been attributed to the low cash availability of the company as it has been going through an expansionary phase during the period.

Moreover, finance cost of the company increased by 8.3 times from its previous corresponding nine-month period as the company went into its plant expansion at Hub and started making interest payments on long-term borrowings. Exchange losses also arose from the high financial cost incurred by the company during the period.

Effective tax rate of the company clocked in at 29.9% during 9MFY18 against 33.1% for the same period last year.

Published in The Express Tribune, April 18^th, 2018.

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