Fauji Cement Posts Profit of Rs. 4.4 Billion in FY22

Fauji Cement Company Limited, which is one of the biggest cement manufacturers, has announced its financial results for the year that ended on June 30, 2022. The company’s profit clocked in at Rs. 4.416 billion, as compared to Rs. 3.469 billion in the same period last year. Along with the result, FCCL announced a 12.5 percent bonus issue, with 273 million shares to be issued (12.5 shares for every 100 ordinary shares). Pertinently, the company has disclosed the combined earnings of FCCL with Askari Cement Limited (ACL) with per-share earnings calculated on the new number of shares post-merger i.e, 2.2 billion shares. According to a report by Arif Habib Limited, the prior earnings are pertaining to Fauji Cement, hence a comparison cannot be drawn until the published accounts of Askari Cement become available. Net sales of the company during FY22 grew to Rs. 54.24 billion from Rs. 24.27 billion in the same period last year as FCCL and ACL sold a combined 5,656,000 tons. Although dispatches depict a decline of 19 percent YoY against 6,974,000 tons sold last year, a robust jump in retention prices in North added revenue to the industry, said a report by Arif Habib Securities. Gross margins during FY22 arrived at 27 percent which remains close to our projected margins for FCCL, implying that both FCCL and ACL managed to overcome cost pressures such as augmented coal costs, PKR depreciation, and higher energy tariff by hiking cement prices during the period in review. FCCL also booked effective taxation at a mammoth 38 percent in FY22 on account of super tax and deferred tax liability impact. The company’s finance cost has increased to Rs. 1.2 billion where the majority of the cost comes from ACL as FCCL’s finance cost during 9MFY22 stood at Rs. 76 million. Moreover, the effective exchange rate came at 62 percent in FY22 versus 47 percent in FY21. Earning per share of the company clocked in at Rs. 3.26 in FY22 as compared to Rs. 1.59.