Fauji Cement profit plummets 75%

Fauji Cement’s profit plummet 75 per cent to Rs250 million for fiscal year 2010 compared with last year’s Rs1 billion.

KARACHI: Fauji Cement’s profit plummeted 75 per cent to Rs250 million for fiscal year 2010 compared with last year’s Rs1 billion. “The company’s fall in net profit was mainly due to a three per cent decline in cement dispatches and 26 per cent lower selling prices year-on-year,” said senior research analyst Sana Abdullah at IGI Securities.

Fauji Cement Company Limited (FCCL) registered sales of Rs3.8 billion, a drop of 28 per cent against Rs5.3 billion posted in the preceding year, according to a notice sent to the Karachi Stock Exchange.

Sales are expected to pick up in the near future, added Abdullah.

Local dispatches for FCCL dropped by 10 per cent to 0.8 million tons on a yearly basis, while exports increased by 21 per cent to 0.33 million tons.

Sales have been disrupted in recent months by the damage to road networks, however, with reconstruction activities picking up following the floods local sales are expected to surge around five per cent, said Abdullah.

Selling price per ton came down by 26 per cent while cost of sales per ton declined by 6 per cent to Rs2,909 per ton on a yearly basis.

Earnings per share of the company stood at a meagre Rs0.31 per share compared with last year’s Rs1.45. The company’s other income dropped 85 per cent to Rs27 million from Rs190 million in the same period last year.

The complete sector has felt the heat as giants Lucky Cement and DG Khan Cement reported a fall in profits by 31 and 55 per cent, respectively, during the same period.

Published in The Express Tribune, September 25^th, 2010.