CHCC - 1QFY24 Result Review - Earnings surpass expectations amid strong margins, (AKD Off the Analyst's Desk Oct 23, 2023)
AKD, Off the Analyst's Desk
CHCC - 1QFY24 Result Review - Earnings surpass expectations amid strong margins
Cherat Cement Company Limited (CHCC) announced their 1QFY24 result where the company posted PAT of PkR1.53bn (EPS: PkR7.9), an increase of 15x/3% QoQ/YoY. The remarkable quarterly growth in earnings is attributed to lower taxation, with the last quarter being impacted by the retrospective implementation of super tax. The result was a bit higher than our estimates as margins remained high during the period.
- Net Sales reached PkR10.1bn for 1QFY24, up by 17/11% QoQ/YoY because of improvement in the company offtakes (up by 7.6%QoQ), and better retention prices (up by 6.6%QoQ). To note, company total sales volumes for the quarter were 0.7mn tons vs 0.65mn tons in 4QFY23.
- Gross margins settled at 30.5% vs. 21.4%/32.0% for 4QFY23/SPLY. This quarterly enhancement is believed to be supported by better retention prices and a decline in the weighted average coal prices.
- Operating expenses clocked in at PkR292mn, witnessing an increase of 3%/23% QoQ/YoY, attributed to heightened inflation.
- Company's finance cost totalled PkR425mn vs. PkR499mn in the previous quarter, reflecting a decline of 15%QoQ, possibly due to a reduction in short-term borrowings.
- Furthermore, Other Income experienced a significant decline of 49%QoQ, reaching PkR48mn, primarily due to a decline in cash reserves.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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