Pioneer Cement Limited (PIOC) announced its 1QFY24 results today, with the company posting NPAT of PkR934mn (EPS: PkR4.11) compared to a loss of PkR100mn (LPS: PkR0.44) in the previous quarter. To recall, the preceding quarter’s earnings were largely hampered by the impact of the super tax’s retrospective implementation and deferred taxation. The result came largely in line with our expectations.

· Net sales of the company clocked in at PkR8.7bn vs. PkR8.4bn in the previous quarter, an increase of 4%QoQ. This rise is primarily attributed to the increase in retention prices (↑7%QoQ), offsetting a 2%QoQ decline in sales volume.

· Gross margins improved to 30.4%, up from 26.6% in the quarter before, primarily due to a decline in coal prices. Notably, ~ 50% of the company’s power is also derived from coal-fired power plants.

· Operating expenses increased by 37%/104% QoQ/YoY, reaching PkR135mn, driven by higher distribution costs (due to the rise in fuel prices) and overall heightened inflation.

· Finance cost arrived at PkR950mn compared to PkR915mm in SPLY, an increase of 4%YoY where a decline in overall borrowings offsets the impact of the increase in interest rates

Courtesy – AKD Research.