Karachi, August 26, 2021 (PPI-OT): Cherat Cement Company Limited: Earnings of PKR 5.06/share reported in 4QFY21; improved retentions and considerably curtailed costs light up performance

Cherat Cement Company Limited (CHCC) announced its financial result for 4QFY21 wherein, it reported a net profit of PKR 983mn (EPS: PKR 5.06), as against net loss of PKR 706mn (LPS: PKR 3.63) in 4QFY20. This concluded FY21 earnings to PKR 3,205mn (EPS: PKR 16.50), as against net loss of PKR 1,893mn (LPS: PKR 9.74). In conjunction with the result the company announced final cash dividend of PKR 1.25/share, taking full year dividend to PKR 2.25/share.

Net Sales of the Company during 4QFY21, as against 4QFY20 increased by massive 87%y/y. However, on sequential basis it declined by mere 1%q/q. The y/y rise in net sales largely driven by notable turnaround in retention prices and increase in sales volumes (up by ~36%y/y). Likewise, during FY21 revenue portrayed an increase of 47%y/y due to aforementioned reasons.

Gross margins of the company jacked up to 28% as against gross loss of -8% registered in last year. This was largely driven by better absorption of fixed cost amid higher volumetric sales. Similarly FY21 gross margins clocked in at 27% as against only 2% registered in last year due to reduced cost structure. The COGS per bag reduced to PKR 234/bag as gainst 247/bag in last year depicted a decline of 5%.

Selling and admin cost of the company jacked up by 33% y/y driven largely from freight cost associated with enhanced export sales made during the quarter.

Finance charges underwent a decent decline of 48%y/y and 1%q/q due to debt retirement amid low interest rate regime.