Karachi, February 20, 2014 (PPI-OT): Fauji Cement: 1HFY14 Result Review…
FCCL posted profit after tax of Rs 1.25bn (EPS: Re 0.94) in its recently announced 1HFY14 results as compared to Rs 0.92bn (EPS: Re 0.69) in the corresponding period last year; showing a sharp uptick of 36.2% YoY along with a cash pay-out of 0.75/sh, which was in line with Standard Capital’s expectations.
According to Standard Capital, in 2QFY14, profit after tax of the company was recorded at Rs 0.669bn (EPS: Re 0.50), up by 19% YoY as against Rs 0.42bn (EPS: Re 0.42) in 2QFY13.
Net sales clocked in at Rs 8.23bn in 1HFY14 which was primarily attributable to the improved cement demand outlook and uptick in a number of Government based projects. Looking forward, dispatches are expected to improve as winter season would end and construction activities start to kick in.
Financial burden to go down…
Due to robust demand growth, per bag cement prices have risen steeply, which has somewhat mitigated the impact of cost increase. Internally generated funds have enabled the company to deleverage its hefty financial burden which would reflect positively on the company’s financial health going forward.
Sales Volumes are expected to propel…
Local sales are likely to ascend in 2HFY14 due to impressive sales growth pattern depicted by the North Zone companies in the 3rd and 4th Quarters. Though losing the Afghan market would badly hit the export sales of the company, management is exploring further markets of Africa and Sri Lanka to enhance its capacity utilization, and hence to cover up the export wedge of the Afghan market.
At current price level (Rs 15.94), FCCL is offering an attractive upside potential of 37.75% based on Standard Capital’s Jun-14 TP of Rs 22/sh. (Wait for Standard Capital’s detailed call in due course)
Q2FY13 Q2FY14 YoY (%) 1HFY13 1HFY14 YoY (%)
Net Sales 4,103 4,359 6.3% 7,567 8,237 8.9%
Cost of Sales 2,680 2,851 6.4% 5,131 5,460 6.4%
Gross Profit 1,423 1,508 6.0% 2,436 2,777 14.0%
Operating Expenses 155 156 0.6% 270 297 9.9%
Operating Profit (EBIT) 1,268 1,353 6.7% 2,165 2,480 14.6%
Other income 6 28 397.8% 20 80 296.7%
Finance Cost 432 321 -25.7% 818 665 -18.7%
Profit before tax (EBT) 842 1,060 25.9% 1,368 1,895 38.6%
Taxation 280 391 39.7% 445 644 44.8%
Profit After tax (PAT) 562 669 19.0% 923 1,251 35.6%
EPS (PKR) 0.42 0.50 19.0% 0.69 0.94 36.2%
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