Islamabad April 19 2023: Fauji Cement Company Limited in these challenging times, reported EBITDA of PKR 5.2 Billion when compared with PKR 3.4 Billion in Q3 last year despite lower sales, according to company filing to the exchange.
Additionally profit for Q3 increased to PKR 1.9 Billion compared with PKR 1.6 Billion last year.
Inflation of 35% compared with 11 % last year coupled with higher interest rates continued to impact the company two folds, increase in cost and decrease in demand.
“Given the continuing economic slowdown, it is expected that cement dispatches may further slowdown. However, your management is determined to counter the headwinds as far as possible” says Company Chairman Waqar Ahmed Malik.
Malik added, “GOP struggling with fiscal deficit had a significant impact on PSDP as dispatches continued on a declining trajectory with capacity utilization at 65% compared with 80% last year.”
Company take key initiatives for cost control that includes (1) Using higher local coal. (2) Increase in captive green energy generation. (3) HR cost efficiencies.
D.G. Khan Expansion. Greenfield Expansion at D.G. Khan despite the economic and logistics headwinds, with management's efforts is expected to be completed by the end of this year.
Solar power generation at our sites is now 29 MW, post completion of 8.6 MW at Wah plant site. By Quarter 4, 2023, this will increase to 40 MW with the commissioning of an 11 MW solar power project at Nizampur in May 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 90 per ton of cement produced.
The fuel mix at all sites is paying dividends resulting in a saving of Rs 215 per ton of cement produced. This was achieved by substituting imported coal with local or Afghan coal and use of alternative fuels.
HR optimization and other initiatives have resulted in a saving of Rs 167 per ton of cement produced.
The 3rd Quarter saw a massive devaluation as the rupee fell from PKR 227 to PKR 284 against USD, as a result, the company booked an exchange loss of PKR 800 million in the finance cost that relates to Expansion Project's financial liability, which can't be capitalized as per IFPKR Profitability was up 19% in Q3 compared to the same period last year, however it was down 30% Q3 vs Q2 due to lower dispatches, higher finance cost post capitalization of Nizampur expansion and including the exchange loss impact as mentioned above. Overall, during the Nine month period of FY 23, the company earned a profit after tax of PKR 6,968 million against PKR 5,345 million in the same period last year, an increase of 30% (YoY).