Pioneer Cement Limited (PIOC) announced its FY24 financial results, posting earnings of PkR5.2bn (EPS: PkR22.8) for the year, compared to PkR2.6bn (EPS: PkR11.5) in the previous year, largely in line with our expectations. In 4QFY24, earnings clocked in at PkR1.3bn (EPS: PkR5.9) vs. a loss of PkR100mn (LPS: PkR0.44) in SPLY, where the loss in 4QFY23 was primarily due to higher taxation, attributed to deferred tax following the imposition of the super tax in the FY24 budget.

Furthermore, the company announced a final cash dividend of PkR10/sh, which was against our expectations of PkR5/sh.

• Topline clocked in at PkR8.1bn in 4QFY24 compared to PkR8.4bn in SPLY, a decline of 3%YoY. The said decline is attributed to a 13% annual drop in offtakes to 0.53mn tons from 0.61mn tons in SPLY, however was partially offset by a 12%YoY increase in retention prices.
• Gross margins improved to 35.4% vs. 26.6% in SPLY, mainly driven by higher cement prices.
• Operating expenses increased to PkR438mn, largely due to higher admin expenses and other expenses related to WWF & WPPF. Notably, the company reported a reversal of other expenses in SPLY, likely due to the net loss.
• The company reported an effective tax rate of 36% for the quarter and 38% for the full-year period. The super tax charge in 4QFY23, reported at PkR1.8bn (ETR: 106%), eroded the quarterly earnings.
• Lastly, the company announced a final dividend of PkR10/sh, bringing the full-year cash payout to PkR15/sh (66% payout).
• Our June ’25 target price on the scrip is PkR185/sh, which provides a capital upside of 7% and an FY25 dividend yield of 12%.

Courtesy – AKD Research