CHCC_4QFY23 Result Review ? Higher taxation hit earnings, (AKD Off the Analyst's Desk Sept 5, 2023)
Cherat Cement Company Limited (CHCC) announced their 4QFY23 result where the company posted PAT of PkR93mn (EPS: PkR0.5), a decline of 93%/91% QoQ/YoY. The decline is majorly on the back of declining margins and higher taxation.
- Net Sales clocked in at PkR8.6bn for 4QFY23, down by 7%/9% QoQ/YoY because of decline in the company offtakes (↓ 8%QoQ). Overall, for the full year, topline increased by 17%YoY, driven by a 42%YoY increase in retention prices, which offset a 19% annual decline in sales volumes.
- Gross margins clocked in at 21.4% vs. 25.9%/28.5% for 3QFY23/SPLY, possibly attributable to the increase in weighted average cost of coal during the quarter.
- Finance cost of the company amounted to PkR499mn vs. PkR415mn in the previous quarter, an increase of 20%QoQ, this is on the back of increase in the effective interest rates (↑3ppts QoQ).
- Furthermore, effective tax charge clocked in at PkR1.0bn, resulting in ETR of 91.7% vs 31.1% in 3QFY23, due to retrospective implementation of supertax on previous three quarters’ PBT and deferred taxation.
- Overall, this takes FY23 PAT to PkR4.4bn against PkR4.6bn in FY22, down by 1%YoY. The said decline is majorly attributable to increase in financial charges and higher taxation.
- Finally, company announced cash dividend of PkR3.0/sh, taking full year dividend to PkR4.5/sh.
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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