FCCL_1QFY24 Result Review, (AKD Off the Analyst's Desk Oct 25, 2023)
AKD, Off the Analyst's Desk
FCCL: 1QFY24 Result Review
Fauji Cement Company Limited (FCCL) announced its 1QFY24 result today, where the company posted earnings of PkR2.6bn (EPS: PkR1.07) compared to PAT of PkR0.5bn (EPS: PkR0.19), an increase of 4.5xQoQ. The robust quarterly earnings is attributed to the management effectively capitalizing the recent expansion (sales volumes ↑25%YoY) and cost efficiencies (optimal coal mix). FCCL's earnings marginally exceeded our expectations of PkR0.93/sh.
- Topline for the quarter increased by 1%QoQ to PkR19.2bn, while reflecting a 16% increase YoYxxTopline of the company clocked in at PkR20.3bn vs. PkR16.2bn in the previous quarter (↑26%/38% QoQ/YoY), where the quarterly increase is primarily driven by increased sales volume, up 20%/25% QoQ/YoY.
- Gross margins settled at 31.1% vs 39.3%/28.7% in 4QFY23/SPLY. The quarterly contraction is primarily due to reclassification of transpiration cost from COGS to Distribution cost. Whereas, improvement on the annual basis is due to increased retention prices and decline in coal prices.
- Distribution cost clocked in at PkR704mn vs. PkR2,283/129mn in 4QFY24/SPLY, (↓69%QoQ, ↑4.5xYoY), due to aforementioned reclassification in the previous quarter.
- Other income is reported at PkR158mn against PkR343mn in previous quarter, down by 54%QoQ, owing to a decline cash reserves in the previous quarter.
- Finance cost clocked in at PkR1.1bn vs. PkR1.1bn in the previous quarter, remaining flat QoQ, where we believe the impact of increased effective interest rates was offset by a potential decline in short-term borrowing.
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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