CHCC_FY20 LPS clocked in at PkR: PkR9.74, (AKD, Off the Analyst's Desk, Aug 26, 2020)
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AKD Research - Off the Analyst's Desk |
Aug 26, 2020 |
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CHCC: FY20 LPS clocked in at PkR: PkR9.74 (Below expectation) |
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· Cherat Cement Company Ltd. (CHCC) posted results for FY20 where company reported loss after tax of PkR1.9bn (LPS: PkR9.74) against profit after tax of PkR1.8bn (EPS: PkR9.07) reported in FY19. For 4QFY20, loss after tax clocked in at PkR706mn (LPS: PkR3.63). Result was below our expectation. · Company's topline increased by 8%YoY for FY20 on the back of increase in dispatches however price competition among local players diminished the impact. For 4QFY20, topline declined 23/8% YoY/QoQ, despite increase in dispatches, due to lower retention prices during the quarter. · Gross margins for FY20 decreased drastically to 2ppts against 18ppts in FY19 majorly as price competition among local players weighed heavily even though lower coal prices provided some room. For 4QFY20, company recorded negative gross margins where lower utilization along with lower prices played a part. · Company financed its last expansion partially through debt and in an environment of high interest rates, finance cost dented the profitability significantly, increasing by 1.21xYoY for FY20, taking the interest cover down to 0.93x for FY20 against 1.01x for FY19. · For 4QFY20, distribution cost declined by 17%YoY where we believe lower exports played a part while administrative cost declined by 24%YoY. |
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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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