Topline Flash Note: Kohat Cement Company Limited (KOHC): Corporate Briefing Notes
- The company expects around 13.7% YoY growth in cement dispatches in the North region during FY21.
- The management is looking to set up a Greenfield plant of 7,000-9,000 TPD in Punjab with an estimated CAPEX of Rs30-32bn. The equity portion is likely to be around 40%.
- As per the management, industry expansions are likely to come online in FY25.
- Retention prices in 1QFY21 improved to Rs5,757/tons from Rs4,835/ ton during 4QFY20.
- Optimization of pyro process of Line III will reduce Fuel and Power cost, which can save around 6-7 Kwh. This project is expected to come online by 2QFY22, while 16.2MW coal fired power plant is likely to come online during 4QFY22.
- Line III consumes 92kwh of electricity for one ton of cement, while Line IV consumes 82 Kwh. For fuel purposes, Line III consumes 800Kcal, while line IV consumes 720 Kcal.
- Grid rate in Sep-2020 was Rs18.04/Kwh, while weighted average power cost of the company was Rs12.27/kwh.
- The company will bid in the coming Pakhtunkhwa Energy Development Organization (PEDO) round for getting cheaper electricity (~Rs10-12/kwh vs. Rs18/kwh of grid).
- The company has a 17MW WHR and 5MW Coal based generation, and also 16MW Furnace Oil capacity to meet its power requirement.
- Company has three properties in Gulberg Lahore. The board has approved Rs500mn for development of these properties to earn rental income.
Dividend payout strategy would be balanced as company also needs to build equity for upcoming expansion.
Kohat Cement Company Limited. Kohat Cement Company Limited is a Pakistan-based company, which is engaged in the production and sale of cement. The Company's products include Grey Cement and White Cement. The Company offers Ordinary Portland Grey Cement under the brand name KOHAT CEMENT. The Company produces and sells White Portland Cement under the brand name KOHAT SUPER WHITE. The Company also offers white canvas for various architectural applications. The Company's white canvas is used for concreting and ornamental applications, terrazzo floorings, fixing of tiles and marbles, and others. The Company's White Portland Cement is available in all local markets in Pakistan and Afghanistan. The Company has an annual production capacity of 2.8 million tons of Grey Cement and 150,000 tons of White Cement. The Company produces both Grey and White Cements at its plants located in Rawalpindi Road, Kohat.
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