Attock Cement Pakistan Ltd (APCL) has reported a fall in profit in the first six months of FY14.
Results
Profit-after-tax decreased by 9% y/y from Rs.958 million in 1H13 to Rs.871 million in 1H14.
Earnings per share fell to Rs.7.61 in 1H14 compared with Rs.8.37 in 1H13.
Earnings declined from Rs.601 million (Rs.5.24 per share) in 2Q13 to Rs.449 million (Rs.3.92 per share) in 2Q14.
The fall in profit is attributed to higher tax rates, inflation and an increase in the cost of electricity and coal.
Outlook
2014 could be potentially difficult for APCL, as well as all cement manufacturers operating in the country, due to rising production and transport costs, power tariff hikes, the devaluation of the rupee and higher interest rates. However, the company is set to benefit from the third quarter increase in the retail price of cement, which will balance out rising costs.
Having increased national grid energy tariffs last year, reports indicate that gas-fed captive power plants will be next to see a tariff hike, pushing up cement prices.
Pakistani cement sales saw an increase of 3.8% in December 2013 and the country records its highest ever local cement dispatches for the first six months of the current fiscal year.
Paul Maxwell-Cook summarises some of the latest developments in this volatile part of the world in this abridged article from the October 2013 issue of World Cement.