More cement companies declare losses

KARACHI: Maple Leaf Cement and Fauji Cement earnings fell in the third quarter of the fiscal year 2010.

The earnings of Maple Leaf Cement Factory Limited and Fauji Cement Company Limited went down by 130 per cent and 93 per cent respectively compared to the same period last year. The market had been expecting a slump in local sales but a slowdown in exports was not expected, which was the real cause of the decline in earnings. Cement manufacturing companies this year had to rely on the domestic market. This led to a drop in sales and that too at lower rates .

“The decrease in Fauji Cement’s profitability is because of the decrease in exports and a considerable fall in gross margins,” said First Capital Equities analyst, Muhammad Rehan Khan. The cement manufacturing sector has been hit hard as all companies which have announced results for the third quarter ended March 31 have reported lower earnings. These companies include Lucky Cement, DG Khan Cement, Attock Cement, Maple Leaf Cement and Fauji Cement. Losses per share of Fauji Cement increased to Rs2.52 against Rs1.12 in the same period last year. Fauji Cement’s net profit decreased to Rs13.5 million against Rs186 million in the same period last year.

Cumulative sales revenue of Fauji Cement dropped by 28 per cent to Rs2.8 billion in the nine months of the fiscal year 2010. Maple Leaf Cement’s losses increased to Rs923 million in the third quarter of the fiscal year 2010 compared to Rs401 million recorded last year. Sales of Maple Leaf were down 12 per cent to Rs2.8 billion in the quarter ended March 31 against Rs3.2 billion last year. Maple Leaf Cement stock was down 6.61 per cent in trading on the Karachi Stock Exchange, closing at Rs4.52. Fauji Cement’s stock fell 1.66 per cent on Tuesday and closed at Rs6.51.