Fauji Cement Posts a 28% Increase in Profits Despite Flat Sales

Fauji Cement Company Limited (FCCL) has posted a net profit of Rs 854 million in the third quarter that ended on March 31 2018, up 28% from Rs 670 million in the same period last year. Earnings per share (EPS) increased to Rs 0.62 from an EPS of Rs 0.48 last year. The company also announced an interim cash dividend of Rs 1 i.e. 10% per share. FCCL total net sales during the period remained almost flat, down from Rs 5.57 billion to Rs 5.54 billion during the outgoing 3 months. Furthermore, Cost of Sales during the period fell by 8.6 % to Rs 4.04 billion. During the quarter, topline of the company remained flattish at Rs 5.6 billion as lower retention prices diluted the impact of growth of 11% in local dispatches and 99% YoY in exports. On the other hand, cost of sales came down significantly by 9% YoY due to a decrease in clinker purchase after Line II of 7,200 TPD came online on 15th October 2017. Cumulatively, during the first nine months that ended on 31 March 2018, the company’s profit was up by 7.61% to Rs 2.12 billion. ALSO READ Fauji Cement’s Profits Rise by 19% During Q2 FY2018 The company’s Net Sales for the nine months were almost flat at Rs. 15.81 billion. Furthermore, the company’s gross profit during the outgoing nine months rose by 7.69 % to reach 3.72 billion. FCCL’s total net sales during the period went up by meager 0.34% during the period, from 15.75 billion to 15.81 billion during the outgoing nine months. Furthermore, Cost of Sales during the period fell by 1.72 percent to 12.085 billion. On the expenses front, FCCL saw a 60% increase in distribution costs and a 9.32% increase in other operating expenses taking away Rs. 692 million from bottom-line profits. FCCL’s script at the bourse closed at Rs 29.79, up by 2.72% with a turnover of 7.75 million shares. Fauji Cement has improved its capacity utilization over the years keeping at pace with the demand. By the time it expanded its capacity in 2011, the company had capacity utilization of about 62 percent which it grew through the years, reaching 85 percent in FY17. Fauji has about 7-8 percent market share in the cement industry. Fauji Cement Company Limited manufactures and sells cement in Pakistan. The company offers ordinary Portland cement, low alkali cement, low heat cement, and sulphate resistant cement.