Fauji Cement Company Limited (FCCL) has announced its financial results for the six-month period ended December 31, 2024, reporting a profit after tax (PAT) of Rs. 7.27 billion, a significant 38% increase compared to Rs. 5.27 billion in the same period last year. Earnings per share (EPS) stood at Rs. 2.96, up from Rs. 2.15 in December 2023.
FCCL’s net revenue for the half-year reached Rs. 47.84 billion, an 18.6% increase from Rs. 40.35 billion in the corresponding period last year. This growth was driven by a 9% year-on-year increase in cement dispatches, which rose to 2.81 million tons from 2.58 million tons.
The company’s gross profit margin improved to 35%, up from 32% in the previous year, reflecting better sale prices and successful cost optimisation initiatives. These initiatives included reducing packing material costs through the acquisition of a PP Bags Plant, increasing the use of local coal and alternative fuels, and optimising fixed costs.
Additionally, FCCL benefited from lower interest rates, as the State Bank of Pakistan (SBP) reduced the policy rate in response to declining inflation.
FCCL’s operating profit for the period stood at Rs. 14.11 billion, a 39.6% increase from Rs. 10.10 billion in the previous year. The company also reported a 38% increase in profit before taxation, which rose to Rs. 11.70 billion from Rs. 8.10 billion.
Finance costs decreased to Rs. 3.00 billion from Rs. 3.36 billion, driven by lower KIBOR rates and improved financial management.
Even though the company had previously declared a final dividend of Rs. 1.00 per share for the year ended June 30, 2024, the Board of Directors did not recommend any cash dividends, bonus shares, or right shares for the period.
Since the announcement of the company’s financials, the stock price for FCCL has gone down by more than 3.5%. It is important to note that over the course of the last one month, the company’s stock price was on an upwards spree. However, the sudden decline in the price, against the market trend could mean that the aforementioned financial performance is not up to the expectations, that the market had, with Fauji Cement.
As one of the bigger players, FCCL remains focused on maintaining its strong market position through continued cost optimisation and operational efficiency. The company’s strategic initiatives, including the use of alternative fuels and increased reliance on local coal, are expected to further enhance profitability in the coming quarters.
