Fauji Cement Posts Rs. 7 Billion Profit in 9 Months of FY24

Fauji Cement Company Limited (PSX: FCCL) has announced its financial results for the nine months that ended on March 31, 2024, posting a profit after tax (PAT) of Rs. 7 billion despite the increased financial cost of Rs. 1.26 billion incurred on expansion-related debt.

In Q3 FY24, PAT clocked in at Rs. 1.76 billion, down 6.3 percent compared to Rs. 1.88 billion in 3QFY23.

FCCL didn’t announce any dividend payouts for its shareholders for the period in review.

Net sales during 9MFY24 clocked in at Rs. 59.4 billion, an increase of 14.4 percent YoY compared to 9MFY23 on the back of higher retention prices, according to Arif Habib Limited,

FCCL said in a brief review that industry dispatches for 9MFY24 were 34.50 million tons as compared to 33.60 million tons in SPLY; an increase of 3 percent YoY. Domestic sales showed a decline of 4 percent while export sales increased by 68 percent mainly attributable to sea exports, which have again become viable due to currency devaluation and lower imported coal prices for the companies in the South.

Company’s dispatches during the nine months FY 24 were 3.79 million tons as compared to 3.76 million tons SPLY; an increase of 1 percent YoY.

Gross profit margin improved to 31 percent as compared to 30 percent in SPLY. This, mainly, is attributable to better sales prices and cost optimization initiatives taken by the FCCL management. As a result of higher exports and devaluation of PKR, the company was able to get better revenue from exports. AHL attributed the uptick in gross margins to higher cement prices in tandem with a fall in coal prices.

On the cost side, increased usage of local coal, initiative to use multiple types of alternative fuels, increase in own power generation to mitigate the 35 percent increase in power tariffs and optimization of fixed costs contributed towards achieving the overall results.

Selling and Distribution expenses in 9MFY24 increased by 30 percent YoY to settle at Rs. 2.5 billion on the back of elevated freight charges given the implementation of the axle load factor, AHL added. In 3QFY24, selling and distribution expenses arrived at Rs. 918 million vis-à-vis Rs. 789 million, up by 16 percent.

Finance costs in 9MFY24 increased by 72 percent YoY to clock in at Rs. 3.57 billion on the back of higher policy rates. In 3QFY24, the finance cost arrived at Rs. 1.57 billion, displaying a jump of 9 percent YoY amid a rise in borrowings and elevated interest rates.

The company booked effective taxation at 33 percent in 3QFY24 vis-à-vis 30 percent in 3QFY23.

FCCL posted earnings per share (EPS) of Rs. 2.87 for 9MFY24 and an EPS of Rs. 0.72 for 3QFY24.

At the time of filing, the company’s scrip at the bourse was Rs. 20.43, up 1.24 percent or Rs. 0.25 with a turnover of 42.9 million shares on Tuesday.