Attock Cement Pakistan Limited (ACPL) announced its 2QFY22 financial result today, where the company posted a profitability jump of 2x QoQ / 37% YoY to PKR 581mn (EPS: PKR 4.23) compared to PKR 425mn (EPS: PKR 3.09) in SPLY. This was primarily owed to recognition of its highest ever quarterly other income of PKR 577mn, on account of dividend income from Iraq subsidiary. This took the 1HFY22 earnings to PKR 852mn (EPS: PKR 6.20), depicting a surge of 56% YoY.
Alongside the result, the company announced a dividend of PKR 2.00/share.
· The company’s topline in 2QFY22 arrived at PKR 5.4bn (down by 7% YoY) as offtake underwent a massive 30% dip YoY to 649K tons which offset the impact of higher retention prices. However, revenue underwent a growth of 22% on a QoQ basis led by 8% jump in offtake coupled with higher retention prices in South. In 1HFY22, topline depicted a dip of 11% YoY to PKR 9.8bn amid a 31% decline in dispatches to 1,248k tons which eroded the impact of higher retention prices.
· Margins of ACPL settled at 20.1% vs. 29.0% in 2QFY21 led primarily by weakness in topline, PKR depreciation, augmented coal prices and higher electricity tariff. Albeit, a small uptick was witnessed over last quarter (1QFY22: 19.0%) as higher retention prices compensated for the augmented coal prices, higher electricity tariff and depreciation in the Pak Rupee. In 1HFY22, gross margins came down to 19.6% vis-à-vis 24.0% in 1HFY21 as sharp jump in coal prices, higher electricity tariff and PKR depreciation offset the impact of recovery in local retention prices.
· Profitability was particularly aided by other income, which arrived at an all-time high quarterly level of PKR 577mn, displaying a massive surge 18x YoY / 13x QoQ in lieu of dividend income from the Iraq subsidiary.
· Selling expenses dipped by 45% YoY during 2QFY22 to PKR 420mn given a 54% YoY decline in exports to 250k tons (2QFY21: 548k tons).
· ACPL booked effective taxation at 39% in 2QFY22 vis-à-vis 33% in SPLY.
Courtesy – AHL Research