Fauji Cement Company Limited Hefty growth in bottom-line in FY15

By: WE Financial Services Limited

Rise in sales, reduced international coal prices, decline in effective taxation due to lower deferred taxation, and lower in finance cost were all the key factors as a result of which the bottom-line of Fauji Cement Company Limited (FCCL) managed to post a significant growth of 57% YoY in FY15.

The profit after taxation (PAT) of the company totaled Rs4,116 million (EPS: Rs2.91) in FY15 versus a PAT of Rs2,626 million (EPS: Rs1.8) in FY14. On the other side, despite the imposition of one-time 3% Super tax, the company posted an impressive growth of 49% on QoQ basis where it recorded a PAT of Rs1,466 million

(EPS: Rs0.92) in 4QFY15 as against a PAT of Rs982 million (EPS: Rs0.74) in 3QFY15. The corporate results were accompanied with a final cash dividend of Rs1.5/share taking the total cash dividend distribution in FY15 to Rs2.5/share.

Top-line elevates 6% YoY: The net revenue of the company totaled Rs18,642 million in FY15 resulting in a 6% YoY growth when compared to a net revenue of Rs17,532 million in FY14. The higher revenue was on back of increased sales volume. The local sales volume of the company totaled 2.2 million tons in FY15 while export sales volume totaled 384k tons during the year. Therefore the total sales volume of the company reached 2.6 million tons in FY15.

Gross margin improves too: The cost of sales witnessed a minor rise of 1% YoY during the year owing to lower coal prices and successful installation of 12MW WHR plant that started producing electricity from March 20, 2015. Further, the company is making efforts to reduce its energy costs while dependency on coal has been reduced through consumption of Municipal Solid Waste (MSW) and poultry waste.

Therefore the gross profit of the company increased by 15% YoY in FY15 to Rs7,027 million as against Rs6,084 million in FY14. The gross profit of the company went up to 37.7% in FY15 versus a gross profit of 34.7% in FY14.

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