Despite recording a handsome growth of 32 per cent in dispatches the cement sector’s combined profit depicted a decline of 64 percent in the first nine months of current fiscal as compared to the same period of last fiscal year.
According to latest figures of All Pakistan Cement Manufacturers Association (APCMA), total cement dispatches grew by 33 percent to 19.73Mt during first ten months of current fiscal year as compared to 14.84Mt in the year-ago period. In April, total dispatches stood at 2.18Mt as against previous month’s (March’s) 2.28Mt.
Seventeen cement companies out of a total 22 listed on the Karachi Stock Exchange (KSE) represent 84 percent of total market capitalisation of the sector, an analysis carried out by JS-Research reveals.
The report also shows that cumulative profits of 17 companies in the first nine months of fiscal 2006-07 stood at Rs2.98 billion or $49m against Rs8.21bn or $135m in the corresponding period of last fiscal year, which depicts a decline of 64 per cent. Despite improvement in cement dispatches, net sale of the sector declined by three per cent mainly on account of lower retention prices, pulling down gross margin to 21 percent in first nine months of current fiscal as it was recorded 39 percent in the same period last year.
In July-March 2007 total cement production was recorded at 13.3Mt as compared to 11Mt registered in the corresponding period of last year which showed a growth of 21 per cent.
In FY07 the installed capacity of cement companies increased to 23.9Mt from 18.4Mt in same period whereas capacity utilisation of cement companies dropped to 74 per cent from 80 per cent in the corresponding period of last fiscal year.
In July-March 2006-07 net sale of cement sector recorded a decline of three per cent to Rs37972m as compared to Rs39087m in the same period a year earlier.
The analysis showed that before paying tax cement sector earned Rs3,890 million profit in first nine months of current fiscal while the industry had earned Rs11,542 million in the corresponding period of last fiscal year. Similarly, after paying tax the cement sector’s profit shrank to Rs2,982 million during this period.
The JS analysis said that only two cement companies out of 17 reported growth in earnings during the first nine months of FY07, over the period whereas Lucky Cement earned highest profit of Rs1.35 billion followed by DG Khan and Attock Cement with profit of Rs1.15 billion and Rs613 million respectively.