FCCL_4QFY23 Result Review- Profit hit by high tax charge, (AKD Off the Analyst's Desk Aug 29, 2023)
AKD, Off the Analyst's Desk
FCCL: 4QFY23 Result Review– Profit hit by high tax charge
Fauji Cement Company Limited (FCCL) announced its 4QFY23 result today, where the company posted earnings of PkR470mn (EPS: PkR0.2) compared to PAT of PkR1.9bn (EPS: PkR0.8), a decline of 75%QoQ. The decline in earnings is primarily due to a notable high effective taxation charge during the quarter.
- Topline of the company clocked in at PkR16.2bn vs. PkR18.2bn in the precious quarter, a quarterly decline of 11%. This decline is majorly attributable to substantial 17% drop in sales volumes, which clocked in at 1.12mn tons vs 1.34mn tons in the previous quarter.
- Gross margins witnessed a remarkable quarterly improvement of 13.4 percentage points, reaching 39.3% during the quarter. This improvement is possibly due better inventory management.
- Other income is reported at PkR343mn against PkR284mn in previous quarter, up by 21%QoQ, driven by an increase in finance income amid interest rate hike.
- Finance cost clocked in at PkR1.1bn compared to PkR1.6bn in the previous quarter, a decline of 30%QoQ while remaining flat annually. The said quarterly decline is due to previous quarter’s high financial charges, partly due to exchange loss.
- Furthermore, effective taxation clocked in at PkR2.5bn, an ETR of 84% vs. 30% in the previous quarter, due to retrospective implementation of super tax on previous PBT and deferred tax.
- Overall, FY23 earnings cumulates to PkR3.03/sh vs PkR2.9/sh SPLY, an increase of 5%YoY. The increase in the annual numbers is largely attributable to enhanced gross margins resulting from higher cement prices and declining coal prices.
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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