Pioneer Cement Limited: 4QFY21 result review

Pioneer Cement Limited (PIOC) reported its FY21 result today, posting bottom-line of PKR 2.0Bn (EPS: PKR 8.69), compared to a loss of PKR 210Mn (LPS: PKR 0.92) in the SPLY. For 4QFY21, the company reported a PAT of PKR 681Mn (EPS: PKR 3.00), ↑117/↓1% YoY/QoQ. The improvement in annual performance was primarily based on higher cement bag prices (↑8% YoY) and greater dispatches (↑95% YoY) due to increased demand from the domestic market. The results were above our estimations. Key highlights of the result are summarized below:

PIOC reported net sales of PKR 21.8Bn (↑247% YoY) in FY21 due to higher retail prices in the north region (↑8% YoY) and greater dispatches (↑95% YoY). During 4QFY21, PIOC posted sales of PKR 6.2Bn (↑19.7x/↓1% YoY/QoQ).

The gross margins improved to 18.9% in FY21, compared to a gross loss in the SPLY due to higher retention prices (↑79% YoY). The gross margins in 4QFY21 dipped to 23.1%, a decline of 1.6ppt QoQ due to higher coal prices.

The distribution costs declined to PKR 119Mn (↓53% YoY), while administration expenses shot up by 18% YoY to PKR 128Mn in FY21, respectively. On a quarterly basis, the distribution cost declined by 2/50% YoY/QoQ to PKR 17Mn in 4QFY21. On the other hand, the administration expenses clocked-in at PKR 34Mn in 4QFY21, an increase of ↑25/1% YoY/QoQ.

The financial charges in FY21, rose to PKR 1.8Bn, up 363% YoY due to higher debt levels. On the other hand finance cost in 4QFY21, clocked-in at PKR 490Mn (↑284% YoY).

Other expenses showcased a large increase to PKR 153Mn in FY21. The other income soared to PKR 303Mn (↑194% YoY).

Courtesy – BMA Capital Management Ltd.

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