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Karachi, March 12, 2013 (PPI-OT): 1HFY13 EPS at PKR3.5; DPS at PKR1.0: Cherat Cement Company (CHCC) announced its 1HFY13 results on February 19, 2013.
According to Elixir Securities Limited the company posted an EPS of PKR6.4, up 5.8x YoY. EPS for 2QFY13 came in at PKR3.5, up 1.2x YoY. Improved margins for the cement sector, owing to favorable cement prices and low coal prices, helped CHCC post stellar growth in earnings in 1HFY13. Elixir Securities Limited expects FY13 EPS to come in at PKR 12.5. The company also announced a cash payout of PKR1.0/share.
| CHCC | Shares outstanding: 96mn | |||||
| PKRmn | 1HFV12A | 1HFY13A | VoY | 2QFV12A | 2QFY13A | VoY |
| Net Sales |
2497 |
3,084 |
24% |
1,329 |
1,631 |
23% |
| Cost of Sales |
2080 |
2,055 |
-1% |
980 |
1,075 |
10% |
| Gross Prof it |
417 |
1,029 |
141% |
349 |
557 |
60% |
| Distribution cost |
116 |
140 |
21% |
69 |
74 |
6% |
| Finance Cost |
186 |
79 |
-58% |
89 |
32 |
-63% |
| Other Operating Exp. |
8 |
45 |
437% |
8 |
26 |
239% |
| Other income |
18 |
11 |
-37% |
9 |
45 |
-48% |
| Prof it before tax |
114 |
777 |
579% |
192 |
430 |
124% |
| Taxation |
25 |
170 |
585% |
36 |
91 |
156% |
| Profit after Taxation |
90 |
607 |
578% |
157 |
339 |
116% |
| EPS (P1(R) |
0.94 |
6.35 |
576% |
1.64 |
3.54 |
116% |
| DPS (PKR) |
– |
1.00 |
1.00 |
|
|
|
Source: Elixir Research, Company Accounts
High margins add to profitability: Cherat cement was able to post stellar growth in profitability due to the improved margins commanded by the cement producers during 2QFY13. Higher cement prices coupled with the decreasing coal prices helped CHCC to post stellar growth in its gross margin. Gross margin for 1HFY13 clocked in at PKR103/bag as against PKR42/bag (up 1.5x YoY) during the same period last year. Elixir Securities Limited expects CHCC’s gross margin for FY13 to likely come in at PKR95/bag, owing to marginally higher coal prices in 2HFY13.
Strong dividend yield to drive performance: At current levels, CHCC offers FY13 dividend yield
of 10% which shall lure investor interest. Along with dividend yield, the stock offers an upside of
11% to Elixir Securities Limited Dec-13 PT of PKR55/share.