Fauji Cement's profit plunges 81.5%

Gross profit of the company plunged over 75% to Rs392m compared to Rs1.6bn in the second quarter of FY1

KARACHI: Fauji Cement Company's profit nosedived 81.5% to Rs189.4 million in the quarter ended December 31, 2019 due to a drastic fall in gross margins.

The company had reported a profit of Rs1.02 billion in the same period of 2018.

Earnings per share of the cement manufacturer fell to Rs0.14 in Oct-Dec 2019 compared to Rs0.74 in the corresponding period of 2018.

Net sales of the company rose from Rs5.1 billion in the second quarter of the fiscal year 2018-19 to Rs5.3 billion in the quarter under review, a rise of 4.4%.

Cement sales grow 5.8% to 20.5m tons in Jul-Nov

"Topline of Fauji Cement witnessed an uptick of 4% year-on-year to Rs5.3 billion during the second quarter of the fiscal year 2019-20, led by a 20% jump in cement dispatches to 925,000 tons, which offset the impact of lower retention prices," stated a report of Arif Habib Limited.

Gross profit of the company plunged over 75% to Rs392 million compared to Rs1.6 billion in the second quarter of FY19.

Gross margins retracted by a massive 25 percentage points in 2QFY20 to 7.4% (2QFY19: 32%) amid rupee depreciation, lower retention prices and higher electricity tariff per kilowatt-hour, the report said.

Published in The Express Tribune, February 22^nd, 2020.

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