Board meeting of Attock Cement Pakistan Limited (ACPL) is scheduled on 26th Apr’21 whereby the company will finalize earnings for 3QFY21. We expect the company to post a bottom-line of PKR 407mn (EPS: PKR 2.96) during the quarter under review against PKR 353mn (EPS: PKR 2.57) in SPLY and PKR 425mn (EPS: PKR 3.09) in 2QFY21.

The YoY growth of 15% in earnings is owed to improved margins of 26.4% (3QFY20: 23.7%) amid higher retention prices (cut in FED to PKR 1,500/ton post FY21 Budget) and soft coal prices, which offset the impact of a 4% decline in total volumes to 748k tons (24% dip in exports given amendments in the Sri Lankan FX regime, which diluted the demand of importers; 20% YoY growth in local offtake led by rebound in economic activity).

Albeit on a QoQ basis, margins are expected to witness a decline of 255bps (2QFY21: 29.0%) attributable to surge in coal and a significant 20% downturn in total offtake given 40% erosion in exports. This should take the 9MFY21 earnings to PKR 951mn (EPS: PKR 6.92), down by 15% YoY from PKR 1,116mn (EPS: PKR 8.12) despite higher margins (24.8% vs. 23.5%) as the company booked a tax credit last year.

Courtesy – Company Financials, AHL Research