Fauji Cement earns record profit of PKR 8.2 billion in FY24

Fauji Cement Company Limited (FCCL) announced a record net profit of PKR 8.22 billion for fiscal year 2023-2024, with analysts attributing it to better sale prices in local market and higher export volumes.

The company also declared a final dividend — after a gap of five years — of PKR 1.0 per share, according to its filing on the Pakistan Stock Exchange website.

The profit was 10.6% higher than FY23's PKR 7.43 billion, translating into earnings per share of Rs3.35.

An analyst at Arif Habib Limited told Nuktathat increased usage of local coal and multiple types of alternative fuels, increased generation of power for its own use to mitigate the 35% increase in power tariffs, and optimization of fixed costs contributed towards FCCL achieving the higher profit.

FCCL also paid deferred tax amounting to PKR 1.8 billion in FY24, primarily due to the shift in income tax treatment on exports from presumptive tax to normal tax. Previously, export sales were taxed at 1%, but this has now been revised to 39% on profit before tax.

Ahsan Mehanti, an analyst at Arif Habib Commodities, said the tax liability had been deferred at the export stage and was collected as normal tax. "This is a one time impact," he commented.

Mehanti said going forward, the profitability of cement companies would be impacted given the deduction in the Public Sector Development Program and dismal economic growth.

The company's dispatches during FY24 were recorded at 5.1 million tons compared to 4.8 million tons in the previous year, an increase of 10% YoY.

During the period, the company earned net revenue of PKR 80.03 billion compared to PKR 68.07 billion in the previous year, an increase of 18% YoY.