Fauji Cement Company posts PAT of PKR 860Mn during 4QFY21 today

Fauji Cement Company Limited (FCCL) announced its 4QFY21 results today, posting PAT of PKR 860Mn (EPS: PKR 0.62), down 15% QoQ. The company’s FY21 earnings clocked-in at PKR 3.5Bn (EPS: PKR 2.52), compared to a loss of PKR 59Mn (LPS: PKR 0.04) in the previous year. Despite stable cement dispatches and higher retention prices (↑3% QoQ), the primary reasons for decline in bottom-line in 4QFY21, were higher coal prices (↑81/14% YoY/QoQ), higher administration expenses (↑42/31% YoY/QoQ) and negative other income. It is pertinent to note that the company did not announce a dividend in-order to conserve capital for their expansion plans.

Key highlights of the result are summarized below:-

The net revenue of FCCL expanded by 80/14% YoY/QoQ to PKR 6.7Bn in 4QFY21 due to higher cement prices (↑19/3% YoY/QoQ) and strong dispatches. Consequently, FY21 sales increased to PKR 24.3Bn, up 41% YoY.

FCCL reported gross margins of 23.5% in 4QFY21, registering an attrition of 6.3% QoQ. This translated into gross profit of PKR 1.6Bn, down 10% QoQ. Decline in gross margins is attributed to higher coal prices (↑81/14% YoY/QoQ). On an annual basis, gross margins rose to 25.0% in FY21, an accretion of 21.2% YoY.

The sales and distribution expenses moved marginally to PKR 48Mn (↓9/1% YoY/QoQ) in 4QFY21. The administration expenses on the other hand, increased by 42/31% YoY to PKR 153Mn in 4QFY21.

Other expenses clocked in at PKR 101Mn (↓12% QoQ) in 4QFY21. The other income was negative at PKR 26Mn.

The company reported Finance income of PKR 95Mn, which we opine must be due to higher cash and greater income from short term investments, supporting the bottom-line modestly.

Courtesy – BMA Capital Management Ltd.

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