Corporate Briefing Notes
Power Cement Limited (POWER) held its corporate briefing session today to discuss the financial results for 9MFY23 and to highlight its future roadmap.
● To recall, net revenue of the company clocked in at PKR21.5bn in 9MFY23, up by 61% YoY, against PKR13.4mn in SPLY. Similarly, EPS of the company reported at PKR 0.26/sh in 9MFY23 compared to LPS of PKR0.15/sh during the SPLY.
● The higher retention prices and improved export sales along with an efficient coal-mix and better plant efficiencies led to massive increase into company’s profitability.
● The management highlighted that, the company witnessed 18% increase in exports dispatches (0.6mn tons) against a 2% decline in local dispatches (1.2mn tons) during 9MFY23. The overall capacity utilization also increased by 68% in 9MFY23 as compared to 60% during the SPLY.
● Sales mix of POWER comprised of institutions (41%) followed by Karachi (33%) and outstation (26%), respectively.
● Company also signed a MoU with ICD to support alternate Fuel Program on May 21, 2023, helping the company to reduce the dependence on coal and increase the use of waste and biomass fuel.
● The company continuously focuses on cost reduction measuress as, local coal share was increased to 50% due to high cost of imports which constitutes 50-70% of total coal consumption during the noted period. Moreover, FX losses are offset by exports due to higher margins.
● The company fulfils around 35% of their total requirement through WHR and the rest through grid. Whereas, the average Grid rate for the 9MFY23 was at around PKR27-28/KWH.
● Going-forward, the company expects a decline in inflation and interest rates, positioning the company to benefit from an upswing in local cement demand. Furthermore, the company is strategically exploring new markets in Zanzibar, Seychelles, and Madagascar to expand its cement exports.
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