Attock Cement Takeaways From Analyst Briefing – OpEd
Attock Cement Pakistan (ACPL) held its corporate briefing to discuss its FY24 and 1QFY25 financial results and future outlook. Following are the key highlights:
Company posted topline of PKR28.5 billion for FY24 as compared to PKR25.4 billion for FY23, up 12%YoY, mainly due to higher offtakes.
Company’s earnings were reported at PKR3.6 billion (EPS: PKR25.9) for FY24 as against PKR1.5 billion (EPS: PKR11.0) for FY23. The said increase was largely attributed to divestment gains of PKR4.3 billion (pre-tax) from the sale of its subsidiary, ‘Saqr Al Keetan Cement production company in Iraq for US$23.4 million.
Earnings for 1QFY25 were recorded at PKR62 million (EPS: PKR0.45) as compared to PKR1.5 billion (EPS: PKR11.23) for the same period last year, down 96%YoY.
Cement industry’s total dispatches increased by 1%YoY to 45.3 million tons, though overall utilization levels fell to 55% in FY24 as compared to 60% in FY23.
ACPL’s local dispatches were recorded at 1.2 million tons, down by 9%YoY. Meanwhile, export dispatches increased by 57%YoY to 1.0 million tons, on the back of 77%YoY higher clinker exports. Subsequently, total dispatches increased by 14%YoY to 2.3 million tons.
Moreover, offtakes rose by 1%YoY in 1QFY25, with local dispatches dropping by 21%Yoy but exports increasing by 42%YoY.
Management stated that company primarily rely on imported coal, constituting 85-90% of their coal mix. While, local coal component is limited to 10-15% due to its higher sulfur content.
Company’s retention prices in FY24 averaged PKR14,700/ton, up from PKR13,400/ton in FY23. Meanwhile, export retention prices decreased to PKR9.400/ton from PKR10.400/ton. Consequently, weighted average retention prices for FY24 declined to PKR12.200/ton from PKR12.400/ton for the same period last year, given a higher export mix.
Production cost increased to PKR10.000/ton in FY24, from PKR9.600/ton in FY23. Wherein, fuel cost reduced to PKR5,000/ton from PKR5,200/ton in FY23, due to efficient coal mix and higher efficiency of Line-4. However, power cost increased due to a 39%YoY increase in power tariff.
Current clinker exports price hovered at US$30/ton, whereas cement export prices were US$40/ton. Meanwhile, MRP in the local market was PKR1,350/bag or PKR27,000/ton.
Company power mix comprises 38% coal-fired boilers, 30% Waste Heat Recovery (WHR), 13-15% solar, and the remainder from grid tariff.
Company’s current capacity stands at 4.3 million ton following the addition of Line-4 in FY24.
Management stated that the company is setting up a 4.8MW wind power plant, which is expected to be commissioned by 3QFY25.
Management expects local cement demand to improve in the coming months. Additionally, the company is striving to secure orders with positive contribution margins despite the prevailing lower export prices.
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