Attock Cement Pakistan Ltd. held its corporate briefing session in which the management discussed the latest financial performance and outlook of the company.

• During FY20, the company posted PAT of PKR 1.1bn as compared to PKR 2.1bn in SPLY, down by 46.6% YoY. During the period, revenue witnessed a decline to PKR 18.5bn against PKR 20.8bn in FY19 due to a lockdown period of almost 90 days during 4QFY20.

• Distribution expense grew by 29.4% to PKR 1.83bn in FY20 as opposed to PKR 1.4bn in FY19 owing to higher clinker export. Consequently, the operating margins of the company shrank to 11% from 15% in SPLY.

• While in 1QFY21, revenue surged to PKR 5.2bn against PKR 4.9bn in SPLY, recording a growth of 5.2% YoY. The growth is attributed to the increase in prices and dispatches. While gross margins decreased to 18.6% in 1QFY21 as compared to 26.2% in 1QFY20 due to the negative impact of devaluation and higher electricity cost.

• The major export destinations of clinker include Bangladesh, East Africa, and China.

• The company is installing a 20MW solar power plant at its factory premise which is expected to come online in 1QFY22. Currently, the per-unit cost of KE stands at ~PKR 16.

• The addition of the solar power plant will reduce the reliance on the grid and it will result in a 13% reduction in power cost. To further reduce the impact of higher power cost, the company is looking for alternate fuels to minimize the impact of rising coal prices.

• As per management, anti-dumping duty on imports has been reenacted in South Africa and currently stands at 40%.

• The management clarified about export-related power tariff relief which is not implemented as yet.

Courtesy – Spectrum Securities Limited.