Cement companies report significant drop in half-year revenue

LAHORE: Cement companies have declared a significant loss in their profit during the first six months (Jul-Dec) of the ongoing fiscal year (2019-20) owing to the high cost of production, record interest rate and an overall economic slowdown.

In a letter to the Pakistan Stock Exchange, Fecto Cement Ltd declared a loss of Rs299 million ($1.48 million) for 6MFY20 as compared to a profit of Rs105 million in the same period of last year. The losses were attributed to a slide in net turnover, which decreased by 22.91pc to Rs1.91 billion (Rs2.28 billion in 6MFY19).

Similarly, Power Cement Ltd reported an after-tax loss of Rs365 million ($2.366 million), as compared to a profit of Rs9.7 million in the corresponding period of last year. The major factors responsible for the fall included reduced earnings and higher expenses, coupled with expensive financing during this accounting period.

Maple Leaf Cement Factory Ltd (MLCF) announced a net loss of Rs1.76 billion ($11.41 million) for 6MFY20 as compared to a profit of Rs1.33 billion last year. The 32.5pc fall was attributed to an increase in the cost of sales and a massive surge in financial cost.

Meanwhile, Gharibwal Cement Ltd (GWLC) incurred a net loss of Rs245 million ($1.58 million) as compared to a profit of Rs593 million last year. The company’s sales also decreased by 6.2pc to Rs5.16 billion from Rs5.51 billion last year.

Dewan Cement Ltd (DCL) reported a net loss of Rs172 million ($1.15 million) as compared to a profit of Rs328 million last year. The losses were attributed to a drastic fall in net sales and a modest increase in distribution and administrative expenses. The company’s sales decreased by 37.1pc to Rs4.04 billion from Rs6.42 billion in the same period last year.

Moreover, Flying Cement Company registered a loss after taxation of Rs293.4 million ($1.9 million) during the half-year ended 31 December 2019 (+Rs77.7 million last year). The key factor behind this loss was the high cost of sales and reduced revenue.

Dandot Cement Co reported a whopping loss after taxation of Rs383 million during 6MY19, compared to a loss of Rs177 million in the corresponding period of last year. The major factors responsible for the loss included lower sales and higher financial cost.

Lastly, Pioneer Cement Ltd (PIOC) posted a loss after taxation of Rs111.66 million ($0.72 million) compared to a profit of Rs526.96 million in the corresponding period of last year. The major factors behind the loss included lesser revenue, fall in cement export, followed by paying a significant amount under federal excise duty.

Separately, Pioneer Cement also informed PSX that Sajid Feroze has been appointed as the company’s CEO in place of Arif Hamid Dar.