PIOC_2QFY23 Result Review,(AKD Off the Analyst's Desk Feb 23, 2023)
AKD, Off the Analyst's Desk
PIOC: 2QFY23 Result Review
Pioneer Cement Limited (PIOC) announced its 2QFY23 result today, where the company posted PAT of PkR1.2bn (EPS: 5.2) vs. PkR0.59bn (EPS: 2.6) in the previous quarter. The result is above our expectations where margins have improved by more than expected and a decline in finance costs of 7%QoQ is seen.
- Net sales of the company clocked in at PkR10.3bn vs. PkR8.3/8.6bn in 1QFY23/2QFY22, up by 24%/20% QoQ/YoY. The increase in the topline is attributed to ~23%QoQ increase in the volumetric sales of the company caused by overall industry demand improvement in the previous quarter.
- Gross margins for 2QFY23 are reported at 27.2% vs. 22.9%/20.6% in 1QFY23/2QFY22, depicting a quarterly improvement of 2.6ppt. We believe an increase in margins is witnessed because of the efficient procurement of coal, as company has major reliance on cheap coal (Afghan & Local).
- Operating expenses of the company have also witnessed an increase of 14%/23% QoQ/YoY, mainly due to inflationary pressures. Other income clocked in at PkR6mn vs. PkR11/9mn in 1QFY23/2QFY22, a decline of 44%/32% QoQ/YoY.
- Finance cost has witnessed a decline of 7%QoQ to settle at PkR853mn in the current period vs. PkR915mn in 1QFY23. The decline in the finance cost of the company is impacted by the company’s continuous commitment to lowering its finance cost, where the company mentioned retiring its high-cost loans by arranging low-cost loans.
- Overall for 1HFY23, company’s PAT is increased by 54%YoY to recorded at PkR1.76bn vs. PkR1.14 for SPLY. The said increase in earnings is attributed to augmented cement prices and improved margins.
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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