Average profitability, after taxation, of four cement companies has declined by 146 percent as compared to the same period of the year 2019, while in nine months period of the current financial year, the profitability has declined by 109 percent.
Sources in the cement sector said that four cement companies namely Attock Cement, DG Khan Cement, Fauji Cement and Kohat Cement have announced their 3Q results so far and these have posted heavy losses. Attock Cement's profit has declined by 37 percent, Kohat Cement by 159 percent, Fauji Cement by 134 percent and DG Khan Cement by 214 percent.
In third quarter 2020, DG Khan posted a loss of Rs 1 billion, Fauji Cement Rs 210 million and Kohat Cement posted a loss of Rs 381 million, only Attock Cement earned a profit of Rs 353 million in 3Q 2020, which is 37 percent lower than Rs 559 million earned in 3Q 2019, said the industry sources.
The combined loss after taxation is Rs 1.241 billion in the third quarter of this fiscal, whereas they posted a profit of Rs 2.703 billion in the same period last year. While in nine months, loss after taxation is 746 million, whereas they posted a profit of 8.613 billion in the corresponding period. The two north-based plants have incurred gross loss in the third quarter which shows that they were not even able to recover the production cost fully.
There was no export to India during this period. The production capacity of the cement sector has increased from 44 million tons in 2014 to 69 million tons. The debt has increased from 62 billion in June 2014 to 180 billion in June 2019.
However, commencement of work on mega projects and housing schemes announced by the government has sent a ray of hope in this sector to perform well in the future, the industry sources concluded.
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