Decline expected in Attock Cement’s profit, Pakistan

Decline expected in Attock Cement’s profit, Pakistan
Published: 10 September 2007

Attock Cement Pakistan Ltd (ACPL) is expected to post a profit after tax of Rs 793m for the financial year 2006-07, which is 13 per cent lower than Rs 909m reported during FY06, Zuhair Abbasi, an analyst at Capital One Equities said in a research report.

The earnings per share (EPS) of the company is likely to decline to Rs 10.99 from Rs 12.59 in the previous financial year.

The company is scheduled to announce its FY07 results on September 11.

The Q4-FY07 earnings are likely to decline by 50 percent on yeat-on-year to Rs 181 million (EPS: Rs 2.52) from Rs 363 million (EPs: Rs 5.03) during Q4-FY06, said Abbasi.

“We also expect the company to pay final cash dividend in the range of Rs 3 per share to Rs 4 per share (FY06: Rs 5 per share),” said the analyst.

He said that he expected the ACPL to have sold 356,000 tonnes of cement in the local market during Q4-FY07, which is 31 percent higher year-on-year. Cumulative local cement dispatches for FY07 were up by 42 percent at 1.188 million tonnes as against 839,000 tonnes during FY06.

ACPL performed reasonably well on the export front, where export dispatches for FY07 increased by a massive 682 percent to 117,000 tonnes as against only 15,000 tonnes during FY06.

Lower expected sales revenue for Q4-FY07 is mainly attributable to huge price differential in the two periods. Cement prices in the local market went down to Rs 216 per bag during Q4-FY07 as against Rs 315 per bag during Q4-FY07.

However, overall sales revenue is expected to be up by 20 percent due to a 42 percent increase in local dispatches. Coal prices went high during FY07 to $78 per tonne (FY06: $68 per tonne), which also is likely to contribute to lower expected gross margin of 39% for FY07 (48 percent in FY06).

Average retention prices for FY07 are expected to have stood at Rs 162 per bag for the company (FY06: Rs 206 per bag).