Islamabad, Fauji Cement Company Limited (FCCL) revealed a significant drop in its third-quarter earnings for fiscal year 2024 today, with profits falling by 34% from the previous quarter. The company reported earnings of PkR1.8 billion, down from PkR2.7 billion, despite a slight increase in year-over-year earnings for the first nine months.

According to AKD Securities Limited, the decline is primarily due to a contraction in gross margins and an increase in finance costs. The company's topline for the quarter decreased by nearly 5% to PkR19.0 billion from PkR20.0 billion, attributed to a 4% drop in offtakes, with sales volume falling to 1.19 million tons from 1.24 million tons in the previous quarter. Gross margins were notably lower, decreasing by 4.5 percentage points to 28.1% from 32.6%, impacted by depreciation charges from recent expansions.

Operational expenses saw a modest reduction of 1.2% quarter-over-quarter, potentially reflecting decreased freight charges linked to the fall in sales volumes. Conversely, finance costs surged by 62% to PkR1.6 billion, up from PkR1.0 billion, primarily due to higher short-term loans. Despite these challenges, FCCL's earnings over the first nine months of FY24 increased slightly by 1.1% year-over-year to PkR2.87 per share.