Karachi: Cherat Cement Company Ltd. (CHCC) unveiled its fourth-quarter financial results for FY24, marking a significant rise in earnings despite a substantial tax burden. The company reported net earnings of PkR0.9 billion, translating to an earnings per share (EPS) of PkR4.4, a stark increase from the previous year’s PkR0.1 billion and EPS of PkR0.5. This growth comes even as the earnings fell short of the expected PkR6.7 per share, primarily due to an unexpectedly high tax rate.

According to AKD Securities Limited, CHCC’s financial performance was bolstered by a 10% year-over-year increase in topline revenues, which reached PkR9.5 billion. This rise was chiefly driven by improved retention prices, although cement offtakes remained steady at 0.65 million tons. The company’s gross margins also saw improvement, rising to 28.1% from 21.4% in the corresponding quarter of the previous year, aided by lower coal prices and higher retention prices.

Finance costs for the quarter were halved to PkR249 million, down from PkR499 million, thanks to a 40% reduction in total borrowings. However, taxation surged to PkR1.3 billion, with an effective tax rate (ETR) of 61%, significantly above the forecasted 39%. This elevated tax rate follows the continuation of a super tax charge in the FY24 federal budget.

For the full fiscal year, CHCC’s earnings totaled PkR5.5 billion, or PkR28.3 per share, up 25% from the previous year’s PkR4.4 billion, or PkR22.7 per share. The company also announced a final dividend of PkR4.0 per share, resulting in a total cash payout of PkR5.5 per share for the year, compared to PkR4.5 per share last year.

CHCC maintains a ‘Buy’ stance on its stock, with a June 2025 target price of PkR205 per share, suggesting a potential capital appreciation of 21% and a dividend yield of 4% for FY25.