Attock Cement turned in a strong performance in 2QFY16 on the back of ever-increasing local dispatches, to take its top-line tally to Rs6.4 billion for 1HFY16. Although its net sales for the period are similar to the sum reported for the same period of the previous fiscal, the real improvement is evident from rising margins.
In 1HFY16, the company has continued to take advantage of rising proportion of domestic sales, lower energy costs, reduced finance costs, as well as lower effective tax rate. Resultantly, both gross margin and net margin have registered improvements, with the latter reported at 18 percent for 1HFY16, as compared to 16 percent for similar period of the previous fiscal.
Along with its announcement of the earnings for FY15, the company had unveiled plans to expand production capacity by 1.1 million tons at a cost of $120 million. At the time, BR Research had pointed out that the company would need to raise finances for this project (see: Attock Cement eyes a larger market share). Purportedly for this reason, the company broke from the past and did not announce any cash dividend along with its latest financial result.
IGI analyst Rashmina Lalani points out that the ACPL is also set to sign an agreement "to establish 0.9 million tons cement grinding unit in Basra, at a cost of $40 million" along with considering a coal-fired power plant to reduce dependence on the national grid.
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