CHCC_1HFY20 LPS clocked in at PkR2.88 - Better than expectation, (AKD, Off the Analyst's Desk, Feb 12, 2020)
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CHCC: 1HFY20 LPS clocked in at PkR2.88 — Better than expectation |
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· Cherat Cement Company Ltd. (CHCC) has announced results for 1HFY20 where company posted loss after tax of PkR560mn (LPS: PkR2.88) against profit after tax of PkR1.0bn (EPS: PkR5.29) in 1HFY19. For 2QFY20, company posted a loss of PkR222mn against profit/loss after tax of PkR596/339mn of 2QFY19/1QFY20. · Topline depicted the trend witnessed by volumes where a QoQ/YoY increase in dispatches for 2QFY20 resulted in topline increasing by 12/36% QoQ/YoY while increased dispatches for 1HFY20 (68%) on YoY basis led to an increase of 35%YoY in sales. · Gross margins for 2QFY20 increased to 9.3% for the quarter against 4.2% in 1QFY19 on the back of recovery in prices and demand however they remain low compared to 19.3% witnessed in 2QFY19 as price competition between the players continues to impart its effect. · Finance cost sank the ship for the company, standing at PkR658mn for the quarter after strain on cash flows due to depleted profitability and financing for the new expansion led to total debt standing at PkR19.7bn as of Sep'19. · Company recorded negative taxation of PkR110mn for the quarter which provided some solace as loss before tax of PkR332mn was decreased to loss after tax of PkR222mn. · We expect the depressed profitability to continue with fickle pricing scenario and increasing costs in the backdrop. Our TP of PkR39.3/sh implies a downside of 23% on the stock – Sell. |
Co. is engaged in the manufacturing and marketing of cement and clinker.
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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