Karachi, August 27, 2019: Fauji Cement Company Limited reported 4QFY19 EPS of Rs0.28, in-line with our estimates of Rs0.28. Cumulatively the company’s EPS for the year of FY19 declined by 17 percent YoY to Rs2.05. Along with the results the company announced a cash dividend of Rs0.75/share taking total DPS to Rs1.5.
The company along with the sector lost its pricing power amidst capacity expansions by peers which resulted in attrition in gross margins by 3 points YoY to 23 percent in 4QFY19.
Surprisingly, distribution and admin cost declined by 25 percent to Rs148 million as compared to Rs197 million in the same period last year. We await detailed accounts for the clarity.
We flag, price competition, higher than expected coal prices, and lower than estimated local demand, as key risk for FCCL.