Pakistan’s major cement companies announce 1Q14 results

For the first quarter of FY14, Attock Cement Pakistan Limited (ACPL) has reported net earnings of Rs.423 million, depicting a growth of 18% y/y. Topline of the company surged by 15% y/y to Rs.2.9 billion against Rs.2.5 billion in the first quarter of FY13, mainly on the back of 14% y/y rise in cement prices in the first quarter of FY14 and increased volumetric sales. The company’s gross margin expanded to 29% in the first quarter of FY14 as compared to 26% in the same period of the previous fiscal year. This growth is an outcome of the 16% y/y decline in international coal prices.

On Tuesday, DG Khan Cement Company (DGKC) announced its results, reporting earnings of Rs.1067 million during the first quarter of FY14, down by 26% y/y as compared to the earnings of Rs.1439 million during the first quarter of FY13. Revenues of the company remained dormant at Rs.5854 million during the first quarter of FY14, despite a 15% y/y increase in cement prices to Rs.500 per bag. Steady revenues were on account of a likely 5% y/y decrease in dispatches. Despite rising cement prices and declining coal prices, the company’s gross margins declined by 34% during the first quarter of FY14. Although DGKC’s earnings come short of the broad market consensus, analysts continue to maintain a ‘favourable’ outlook.

Meanwhile, the impact of energy price hikes is set to put pressure on prices in the country. Gas and electricity tariffs have risen, freight costs have likewise increased and the cost of imported coal has gone up with the depreciation of the rupee. Industry insiders predict that these costs will be passed on to customers, though prices have remained relatively stable in recent months with the exception of the increase when new tax measures were introduced in the budget. With this in mind, cement prices are likely to rise due to high input costs.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/23102013/pakistans_major_cement_companies_announce_1q14_results_326/