Fauji Cement Company Limited (PSX: FCCL) was set up in 1992 under the Companies Ordinance, 1984. It is a public limited company, and began operations in the following year, in 1993. The company manufactures and sells various kinds of cement.
Fauji Cement Company initially started with a production capacity of 3,700 tons per day that has grown to 11,000 tons per day. It also has two Waste Heat Recovery Power Plants (WHRPPs) of 12 MW and 9 MW, one set up in 2015 and another in 2018. recently company also announced to setup Greenfield Cement Manufacturing Plant in Punjab.
In FY21 saw improvement. Revenue grew by almost 30 percent in 1QFY21, year on year. As economic activities resumed as lockdowns, eased, demand and prices also picked up. Fuel and power expense is one of the major components of cost. The company managed to reduce these costs during the period by “maximizing its own power generation from its gas engines and solar plants to rationalize the power cost”, as is reflected in cost making 78.4 percent of revenue, compared to 86 percent in 1QFY20. Thus, net margin doubled year on year, to 12.7 percent for 1QFY21.
The second quarter saw revenue higher by almost 15 percent year on year; industry dispatches were 16 percent higher, while company’s dispatches were 9 percent higher. It was subdued due to reduction in exports due to Afghan border closure, whereas for the industry, export dispatches registered a 15 percent growth. The industry as a whole picked up as government announced infrastructure projects and incentives. Thus, net margin stood at 14.8 percent for 2QFY21.
The third quarter saw a 50 percent rise in revenue year on year, while margins, at 14.9 percent cumulatively for 9MFY21 improved due to higher dispatches and improved retentions. Industry demand is expected to grow while rising international coal prices and country’s electricity prices continue to pose a challenge.