Cherat Cement Company posted highest ever quarterly earnings of PkR1.9bn in 2QFY24

Cherat Cement Company Limited (CHCC) announced their 2QFY24 result, where the company posted highest ever quarterly earnings of PkR1.9bn (EPS: PkR9.6) vs. PAT of PkR1.5bn (EPS: PkR7.9) in the quarter before, up 22%QoQ. The said quarterly earnings growth is majorly attributable to the gross margin expansion, possibly due to the lower weighted average cost of coal during the period.

 ·         Net Sales clocked in at PkR10.2bn for 2QFY24 (↑1%QoQ/↓2%YoY). Higher retention prices mainly drive the quarterly increase.

·         Gross margins improved to 34.6% vs. 30.5%/28.7% for 1QFY24/2QFY23, respectively, where we believe the decline in weighted average coal prices to have positively impacted margins.

·         Finance cost of the company reported at PkR386mn vs. PkR425mn in the previous quarter, down 9.1%QoQ. The decline is due to reduced borrowing as total debt decreased to PkR9.9bn in 1QFY24 accounts from PkR15.8bn in SPLY.

·         Other Income increased 194%QoQ to clock in at PkR142mn vs. PkR48mn in the previous quarter, owing to increased ST investments.

·         Overall, this takes 1HFY24 PAT to PkR3.4bn (PkR17.5/sh) against PkR3.04bn in SPLY, up by 12%YoY. The increase is mainly attributed to a 12%YoY increase in gross profits amid higher retention prices.

·         Alongside the results, the company announced an interim cash dividend of PkR1.5/sh.

Courtesy – AKD Research

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