AZEE Securities Blog : ACPL: Higher Cement Prices Boosts Earnings

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ACPL: Higher cement prices boost earnings:

Attock Cement Company limited (ACPL) witnessed decent growth of 18% growth in
bottom-line as company posted earnings of Rs 1,025 million (EPS Rs 8.95) in 1HFY15
against Rs 871 million (EPS Rs 7.61) in 1HFY14. Surge in earning mainly attributed to
higher retention prices, better sales mix and surge in other income. Likewise, earnings
rise by 18% QoQ to Rs 554 million (EPS: Rs 4.84) against Rs 470 million (EPS: Rs 4.11)
during 1QFY15 owing to 2% rise in volumetric sales and lower coal prices along with
higher other income.

Strong prices propel revenue

Net sales of the company surge by 7% to Rs 6.36 billion in 1HFY15 compared to Rs 5.96
billion owing to the higher cement price which on average increased by 11% at Rs
522/bag versus Rs 469/bag in 1HFY14. Volumetric sales hike marginally by 1% to 925k
million tons in 1HFY15 against 920k million tons witnessed in 1HFY14. Local dispatches
witnessed decline of 14% to 511k tons in 1HFY15 versus 593k tons in 1HFY14. While
exports increased by 26% owing to higher demand in East Africa, South Africa and Sri
Lanka.

Gross margin getting stronger

Gross profit of the company showed growth of 18% at Rs 1.99 billion versus Rs 1.69 billion
in 1HFY14 mainly due to higher cement prices and lower cost of sales. Cost of good
sold marginally rise by 2% to Rs 4.37 billion against Rs 4.27 billion in 1HFY14 due to
lower coal prices. Gross margin considerably increased to 31.4% from 28.3% in 1HFY14.
Retention prices up by 8% to Rs 6,865/ton versus Rs 6,363/ton in 1HFY14. Similarly,
EBITDA per ton increased to Rs 1,666/ton against Rs 1,400/ton in same period last year.

Rs in million                    1HFY15    1HFY14    YoY    2QFY15   1QFY15   QoQ
Net Sales                               6,369         5,967        7%        3,193       3,176        1%
Cost of Goods Sold               4,372         4,276        2%        2,138       2,234       -4%
Gross Profit                           1,997         1,691        18%      1,055        942         12%
Distribution Cost                    544            435          25%        273         271          1%
Administrative Expense         174            151          15%         87            88         -1%
Other Expenses                      102              83           23%        56            47          19%
Other Operating Income        214            117            83%     122            93          31%
Operating Profit                    1,391         1,139          22%     761         630           21%
Finance Cost                           15              12             29%        6              8           -25%
Profit before Taxation          1,376          1,127         22%      755          621          21%
Taxation                                 352             256           37%      201         151          33%
Profit after Taxation            1,025            871           18%      554         470          18%
EPS (Rs)                                8.95           7.61                          4.84      4.11