Karachi, September 05, 2023 (PPI-OT): CHCC: 4QFY23 Result Review- Higher taxation hit earnings

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 sales volumes.

Gross margins clocked in at 21.4% vs. 25.9%/28.5% for 3QFY23/SPLY, possibly attributable to the increase in weighted average cost of coal during the quarter.

Finance cost of the company amounted to PkR499mn vs. PkR415mn in the previous quarter, an increase of 20%QoQ, this is on the back of increase in the effective interest rates (UP3ppts QoQ).

Furthermore, effective tax charge clocked in at PkR1.0bn, resulting in ETR of 91.7% vs 31.1% in 3QFY23, due to retrospective implementation of supertax on previous three quarters’ PBT and deferred taxation.

Overall, this takes FY23 PAT to PkR4.4bn against PkR4.6bn in FY22, down by 1%YoY. The said decline is majorly attributable to increase in financial charges and higher taxation.

Finally, company announced cash dividend of PkR3.0/sh, taking full year dividend to PkR4.5/sh.