It is said that good things come to those who wait. In the case of Fauji Cement (FCCL), investors were made to wait for the release of the company's financial results for FY15 as the board meeting was postponed. When the result was finally revealed; it presented a positive surprise as the company beat market expectations for both earnings and dividends.
The company's performance was aided by a strong fourth quarter which saw sales rise by 18 percent over 3QFY15. Tame commodity prices ensured that the concurrent rise in cost of sales was relatively muted. The company's new waste heat recovery plant also helped to keep cost of production in check. As a result, the companys gross margin was beefed up to 38 percent in FY15.
BMA analyst, Sajjad Hussain highlights that finance cost declined by a hefty 32 percent, quarter-on-quarter. While the effective tax rate for the outgoing fiscal tallied 28 percent, as compared to 42 percent in FY14.
Although distribution costs, administrative and other expenses all posted double-digit hikes; as a proportion of the top line, all these costs remained relatively stable. Hence the improvements in top line and COGS were largely preserved through to the bottom line. Net margins for FY15 are reportedly much better; showing an improvement of 700 basis points.
The consensus estimate by industry analysts for profit after tax had stood at Rs3.54 billion while the full-year dividend payout was expected to tally Rs2.125. However, the strong showing in 4QFY15 helped the company beat these estimates, with a margin. The full-year dividend for FY15 tallied Rs2.5 per share; including Rs1.5 per share paid out at year-end.
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