Kohat Cement Company Limited (KOHC) announced its 3QFY21 financial result today, posting a profit after tax (PAT) of PKR 1,059mn (EPS: PKR 5.27), compared to a loss of PKR 381mn (LPS: PKR 1.90) during SPLY. This took the cumulative 9MFY21 bottom-line to PKR 2,532mn (EPS: PKR 12.60), vis-à-vis loss of PKR 283mn (LPS: PKR 1.41) in SPLY.

Result Highlights

· KOHC displayed a stunning topline jump of 2.6x YoY during the quarter under review to PKR 6.7bn led by higher retention prices (surge of PKR 50/bag in North during Jan’21) together with a 61% YoY jump in dispatches (989k tons in 3QFY21 vs. 614k last year). During 9MFY21, revenue witnessed a noteowrthy 108% growth YoY attributable to restoration of retention prices as well as higher offtake (2,856k tons vs. 1,758k tons in 9MFY20).

· Gross margins dispalyed a remarkable turnaround and arrived at 25.9% in 3QFY21 (gross loss in SPLY; -8.5%) attributable to recovery in retention prices, volumetric growth, and soft coal prices which offset the impact higher energy tariff per unit. On a QoQ basis, margins were eroded by 168bps given higher coal prices, which offset the impact of higher prices and PKR appreciation. That said, in 9MFY21 margins arrived at 24.3% (9MFY20: -0.6%) owed to aforementioned reasons.

· Finance costs dipped by 32% YoY to PKR 119mn in 3QFY21 amid lower interest rates.

· The company booked effective taxation at 28.6% in 3QFY21 vs. a tax credit of PKR 55mn last year.

Courtesy – AHL Research