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 s...
Cherat Cement (CHCC) has posted 3QFY23 NPAT of PKR1.3bn (EPS: PKR6.55), up 19% YoY but down 18% QoQ. The result came in lower than our expected earnings of PKR1.6bn (EPS: PKR8.17), majorly due to lower than expected GMs. The company has announced interim cash dividend of PKR1.50/sh. This takes 9MFY23 NPAT to PKR4.3bn (EPS: PKR22.19), reflecting a growth of 25% YoY. KEY HIGHLIGHTS OF 3QFY23 RESULT: * Net revenues have increased to PKR9.3bn, up 19% YoY but down 11% QoQ. Despite the reduction i...
Cherat Cement (CHCC) has posted 2QFY23 NPAT of PKR1.6bn (EPS: PKR8.01), up 32% YoY and 5% QoQ. The result came in higher than our expected earnings of PKR1.2bn (EPS: PKR6.15). Higher-than-expected revenue was the major deviation. This takes 1HFY23 NPAT to PKR3.0bn (EPS: PKR15.64), depicting a growth of 28% YoY. Key highlights of 2QFY23 result: * Net revenues has increased to PKR10.4bn, up 37% YoY and 15% QoQ, this is due to a large jump in local cement prices. We expected a topline of PKR8.6...
Cherat Cement (CHCC) has posted 1QFY23 NPAT of PKR1.5bn (EPS: PKR7.63), up 24% YoY and 45% QoQ. The result came in much higher than our expected earnings of PKR834mn (EPS: PKR4.29). A massive surge in gross margins lead to the major deviation. KEY OBSERVATIONS * Net revenue has clocked in at PKR9.0bn, up 26% YoY but down 5% QoQ. The YoY jump in sales is majorly attributed to swift increase in local cement prices, which had more than offset the reduction in volumes in 1QFY23. That said, reven...
Cherat Cement (CHCC) has posted 4QFY22 NPAT of PKR1.0bn (EPS: PKR5.25), up 4% YoY, but down 4% QoQ. The result came in higher than our expected earnings of PKR899mn (EPS: PKR4.63). Lower than expected effective tax rate majorly led to the deviation. This takes FY22 NPAT to PKR4.46bn (EPS: PKR22.93), reflecting a growth of 39% YoY. The company has announced final cash surprise payout of PKR3.0/sh, despite undertaking greenfield expansion. KEY RESULT HIGHLIGHTS: * Net revenues have increased ...
StockSmart Weekly Review Week started on a bad note with the market declining by 1.9% on the first trading day as lack of economic direction weighed heavily. Even though market recovered in later trading sessions, but overall market remained choppy, lacking clear direction throughout the week. KSE-100 closed the week at 43,101pts, down 0.89%WoW while average volume for the week stood at 220.8mn against 274.04mn for last week. Overall, po...
Cherat Cement (CHCC) has posted 3QFY22 NPAT of PKR1.1bn (EPS: PKR5.48), down 3% yoy and 10% qoq. The result is broadly in line with our expected earnings of PKR1.1bn (EPS: PKR5.87). This takes 9MFY22 NPAT to PKR3.4bn (EPS: PKR17.68), reflecting a growth of 55% yoy. KEY HIGHLIGHTS OF 3QFY22 RESULT: * Net revenues have increased to PKR7.6bn, up 14% yoy and 2% qoq. The increase in sales is majorly attributed to an increase in local cement prices during the quarter. * GMs have clocked in at...
IMS Cement Universe cumulative core profits are expected to decline sharply by c.18%/38% qoq/yoy to PKR7.7bn in 3QFY22, from PKR9.6bn in 2QFY22 and PKR13.1bn in 3QFY21. Despite better retention prices and import of coal from Afghanistan, lower utilization levels during the winter season and elevated international coal and oil prices will reduce sequential gross margins, by c.5ppt. Therefore net profits are estimated to decline. During the quarter, IMS Cement cluster declined by 5.8%, underper...
* We are revising estimates for our Cement coverage led by (i) elevated international energy prices, (ii) slower demand growth amid rising construction cost and lower government spending, (iii) inclusion of new expansions, and (iv) potential resumption of monetary tightening. * We assume that local cement demand growth will be flat in FY22f and expect an increase of 3%/5% yoy in FY23/24f, much lower than our previous growth estimates and also past 20yr average. Besides demand, major thr...
Cherat Cement (CHCC) has posted 2QFY22 NPAT of PKR1.18bn (EPS: PKR6.06), up 44% yoy but down 1% qoq. The result has come in line with our expected earnings of PKR1.14bn (EPS: PKR5.85). Importantly, despite a massive surge in international coal prices, earnings remained largely unchanged vs. the previous quarter. This takes 1HFY22 NPAT to PKR2.37bn (EPS: PKR12.20), reflecting a growth of 110% yoy. KEY HIGHLIGHTS OF 2QFY22 RESULTS: * Net revenues have increased to PKR7.62bn, up 20% yoy and 6% ...
Cherat Cement (CHCC) has posted 1QFY22 NPAT of PKR1.2bn (EPS: PKR6.14), up 3.9x yoy and 21% qoq. The result has come higher than our expected earnings of PKR877mn (EPS: PKR4.51), where the major deviation was lower realization of coal prices as compared with our assumption. The qoq increase in earnings stemmed from increase in gross margins amid elevated retention prices and decline in average coal prices because of usage of local and Afghan coal. KEY HIGHLIGHTS IN 1QFY22 RESULTS: Despite the...
* We are revising estimates for our Cement coverage led by (i) elevated international energy prices, (ii) possible increase in interest rates going forward, (iii) inclusion of new expansion and (iv) revised local demand outlook and cement prices. * We believe that local cement demand will increase by 7%/5% in FY22/23f, lower than our previous estimates of 10%/8%. Presently, coal prices pose the biggest threat to the profitability of the sector but we assume that global prices will norma...
EARNINGS TO DECLINE DUE TO LOWER VOLUMES AND ELEVATED COSTS * The cumulative profits of our Cement universe (unconsolidated) are expected to decline c.20% qoq to PKR6.0bn in 1QFY22 from PKR7.5bn in 4QFY21. However, on a yoy basis, the sector’s performance is expected to rise by c.64% from PKR3.7bn in 1QFY21. * Elevated variable costs amid increase in global coal and oil prices, along with PKR depreciation and lower volumes, are key reasons behind the expected sequential decline in gross...
Cherat Cement (CHCC) has posted 4QFY21 NPAT of PKR983mn (EPS: PKR5.06), in line with our expected earnings of PKR985mn (EPS: PKR5.07), taking FY21 NPAT to PKR3.20bn (EPS PKR16.50). The qoq decline in earnings stemmed from (i) decline in cement sales and a 2.7ppt qoq decline in gross margins to 27.8%. The result was accomplished with final cash dividend of PKR1.25/sh, taking total dividend in FY21 to PKR2.25/sh; we were not expecting any dividend in the result. KEY HIGHLIGHTS: * Net revenue i...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
We are revising the estimates of our Cement Universe, to adjust for rising global coal prices (up 33% since Feb 2021). Our EPS estimates for FY22/23f are down by 9%/7% on average. Note that we also assume higher local demand, which should allow better pass-through and higher retention prices – containing the decline in margins due to higher coal prices. We have also rolled over our target prices to June 2022, hence our TPs are largely similar to before the above changes. The cement stocks in ...
Cherat Cement (CHCC) has posted 3QFY21 NPAT of PKR1.1bn (EPS: PKR5.63), better than our expected profits of PKR955mn (EPS: PKR4.92), where higher gross margins and lower finance costs were the main deviation. The yoy jump in earnings stemmed from (i) substantial 30ppt yoy rise in gross margins to 30.5%, and (ii) decline in finance cost by 52% yoy. 3QFY21 Key result highlights: Net revenue increased by 73% yoy to PKR6.83bn in 3QFY21. Key factors behind the revenue increase were higher local sa...
The IMS Cement Universe is expected to post combined net profits of about PKR11.25bn for 3QFY21 results, which will be a c.37% qoq rise from the cumulative profits of PKR8.23bn in the previous quarter. Key drivers were both greater volumes and higher local retention prices. All cement companies in our coverage, including DGKC and PIOC, are expected to post decent earnings for the period. Despite the recent correction in Cement sector stock prices, we believe that strong profitability show fro...
AKD Daily Pakistan Cement: Profitability for 2QFY21 increased by 9.8x/2.1xYoY/QoQ AKD Cement universe posted a stellar increase in profitability of 9.8x/2.1x YoY/QoQ as profit after tax stood at PkR6.6bn for 2QFY21 while gross margins stood at 24% against 11/19% for 2QFY20/1QFY21. Profitability for 1HFY21 stood at PkR9.8bn against a loss of PkR615mn as gross margins improved to 22% from 9% in 1HFY20 on the back of players engaging in severe price competition during 1HFY20 in the backdrop of...
Cherat Cement (CHCC) has posted 2QFY21 NPAT of PKR820mn (EPS: PKR4.22), much better than our expected profits of PKR525mn (EPS: PKR2.70), where higher gross margins were the main deviation. The yoy jump in earnings stemmed from (i) substantial 17ppt yoy rise in gross margins to 26%, and (ii) decline in finance cost by 45% yoy. The company has also announced an interim dividend of PKR1.0/sh in 2QFY21, whereas we were not assuming any payout. 2QFY21 Key result highlights: Net revenue increased ...
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