Fauji Cement profit jumps 138pc to Rs696m in 1QFY21

The Board of Directors of Fauji Cement Company Limited (FCCL) met on Thursday to review the company's performance and announce its financial results for the first quarter ended September 30, 2020.

As per details, the cement manufacturer posted a profit after tax (PAT) of Rs696 million (earnings per share: Rs0.50) in 1QFY21 as compared to a PAT of Rs293 million in 1QFY20, showing an increase of 138pc.

The company’s sales stood at Rs5.501 billion as compared to Rs4.243 billion last year, depicting a growth of 30pc.

During the period under review, the company’s cost of sales increased 18pc to Rs4.313 billion as compared to Rs3.652 billion last year.

Meanwhile, the cement manufacturer’s gross profit clocked in at Rs1.188 billion in 1QFY21 as compared to Rs591 million in 1QFY20, showing an increase of 101pc.

The company’s distribution costs, admin expenses, finance cost and other income decreased 9pc, 6pc, 29pc and 71pc YoY, respectively, during the period under review.

Shahrukh Saleem, an investment analyst at AKD Securities Ltd, said that the result was significantly better than AKD's expectation mainly due to higherthanexpected gross margins. He said the company's revenue increased by 30pc/47pc YoY/QoQ, where apart from increase in dispatches, improved pricing scenario and decreased discounts also contributed heavily.

"Additional impetus must have been provided by a decline in Federal Excise Duty (FED) to Rs75 per bag from Rs100 per bag," the investment analyst added.

The gross margins for 1QFY21 stood at 22pc against 6pc/14pc recorded in 4QFY20/1QFY20 while surpassing AKD's expectation by a massive 10ppts, Saleem stated, adding that deviation largely occurred from lowerthanexpected cost of sales which AKD attributes to efficient procurement of coal.