Islamabad February 14 2023: Fauji Cement Company Limited profitability increased by 34 percent in first half due to efficient operations, according to company filing at the Pakistan Stock Exchange.
“A Double digit inflation, hike in interest rates and consequently sharp devaluation of Pak Rupee has dampened the overall cement demand, Low GOP growth, high cost of construction materials and cut in PSDP saw Cement dispatches declined by 21% year on year in 1st half of FY23.”
Says Company Chairman Waqar Ahmed Malik
However, the second quarter saw the company’s dispatches rebound 30% as compared to Q1 (1.39 million tons vs 1.1 million tons) as the impact of flooding in the country receded and dispatches to large projects mainly hydropower dams picked up meeting the specific technical specifications of those projects. For 1st half of FY23, dispatches of 2.5 million tons (including 9.8% sales of “Green Cement”) were achieved as compared to 2.9 million tons in the same period last year, a decrease of 14% (YoY),
Our initiatives of using higher local coal and increase in captive green energy generation helped keep overall cost per ton in check despite the above-mentioned external factors, The company earned a PAT of Rs 2.8 billion in Q2 as compared to Rs 2.3 billion in Q1 , an increase of 22%.
Overall, during the 1st half of FY23 the company earned a profit after tax of Rs. 5,079 million (including Rs. 148 Million super tax) against Rs 3,787 million in same period last year, an increase of 34% (YoY).
“The Company successfully achieved Commercial Operations of its new cement manufacturing line having clinker capacity of 6,500 tons per day at Nizampur as per plan.” Says Company Chief Executive Officer Qamar Haris Manzoor.
Management is optimistic that D.G. Khan Expansion. Greenfield Expansion at D.G. Khan is expected to be completed by end of this year.
Says Chief Executive Officer Qamar Haris Manzoor
Solar power generation at our sites is now 29 MW, post completion of 8.6 MW at Wah plant site. By Quarter 3, 2023, this will increase to 40 MW with the commissioning of an 11 MW solar power project at Nizampur in October 2023. Consequently, up to 60% of all power requirements will be met by either solar power or waste heat recovery power projects. The cost per ton saving is Rs 110 per ton of cement produced.
The energy mix at all sites is paying dividends resulting in a saving of Rs 195 per ton of cement produced. This was achieved by substituting imported coal with local or Afghan coal and use of alternative fuels, says Haris.
HR optimization and other initiatives have resulted in a saving of Rs 170 per ton of cement produced.
The Company successfully implemented an ERP SAP system with GO Live achieved in December 2022.
Given the continuing economic slowdown, it is expected that cement dispatches may further slowdown. However, we are determined to counter the headwinds as far as possible says Haris.
