Attock Cement bottom-line declined by 57% YoY during the 1QFY23

Attock Cement Pakistan Limited (ACPL) announced the financial result for 1QFY23 today whereby earnings arrived at PKR 116mn (EPS: PKR 0.84) against PKR 271mn (EPS: PKR 1.97) last year and a loss of PKR 59mn (LPS: PKR 0.43) in 4QFY22. Primary reason behind the QoQ improvement is the 10% super tax and deferred tax liability impact booked in 4QFY22 on earnings of full year.

Result Highlights           

·        During 1QFY23, sales remained stagnant at PKR 4.4bn as a result of massive hikes in retention prices which were countered by a 44% YoY decline in offtake to 335k tons given monsoon rains and flooding across the country.

·        The gross margins in 1QFY23 settled at 16.9% vis-à-vis 19.0% in SPLY owed to volumetric decline, jump in coal prices, higher energy tariff (plant was shut down for half a quarter so lower usage of waste heat recovery plant added to the woes), and PKR depreciation. However, gross margins climbed up from 13.5% in 4QFY22 as the company incorporated more Afghan coal in its coal mix during the quarter coupled with higher retention prices.

·        Finance cost arrived at PKR 136mn during the quarter under review, up by 4x YoY / 37% QoQ, attributable to higher interest rates.

·        The company booked effective taxation at 32% in 1QFY23 vs. 23% in SPLY given recognition of super tax to the tune of 4% this year.

Courtesy- AHL Research

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