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FCCL expects earning decline by 16% YoY

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Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com

Fauji Cement Company Limited (FCCL) is scheduled to announce its 3QFY19 financial result on Thursday (18th Apr’19) whereby analysts expect the company to post earnings of PKR 719mn (EPS: PKR 0.52), down by 16% YoY and 30% QoQ.

Weaker profitability forecast stems from a decline in topline to PKR 4.5bn, down by 19% YoY given a sharp 26% YoY dip in total dispatches to 684k tons.

While coal prices tapered off from prior year, 20% depreciation in the Pak Rupee and volumetric decline may restrict margins at 26% vis-à-vis 27% in SPLY.

Albeit, distribution costs will relieve some pressure off the bottom-line; at PKR 23mn compared to PKR 72mn in 3QFY18 led by a 30% cut in exports to 27k tons.

The decline appears more evident on a QoQ basis as 11% decline in volumes together with PKR depreciation eroded margins and hence, earnings.

On a cumulative basis, bottom-line during 9MFY19 is expected at PKR 2,543mn (EPS: PKR 1.84), depicting a jump of 20% YoY.

Despite a 6% slowdown in revenue to PKR 14.9bn (13% volumetric decline YoY), margins recuperated to 28% (9MFY18: 24%) amid operationalization of Line-II and higher retention prices in the period under review.

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