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Power Cement reports 82% YoY rise in 1H net profit

Power Cement posted a 43.6 percent increase in revenues to PKR5162m (US$29.1m) in the quarter ended 31 December 2021 (2QFY21-22), up from PKR3595m m in the 2QFY20-21.

Operating profit saw a 37.3 percent hike to PKR961m in the 2QFY21-22 from PKR700m in the equivalent period of the previous year. Net profit advanced 96.7 percent YoY to PKR471m in the 2QFY21-22 from PKR239.4m.

Half-year results
In the half-year ended 31 December 2021, Power Cement saw its revenues increase by 35.7 percent to PKR9276m from PKR6835m in the 1HFY20-21. Operating profit reached PKR1377m, up 23.2 percent from PKR1117m in the equivalent period of the previous year while net profit advanced 81.8 percent to PKR280m from PKR154m over the same period.

Pakistan: January cement sales down 16.58pc

Pakistan Cement dispatches declined 16.58 percent to 3.95 million tonnes in January 2022 against 4.73 million tonnes in the corresponding period last fiscal, mainly due to harsh weather in hilly areas that affected construction and transportation activities.

According to the data released by All Pakistan Cement Manufacturers Association (APCMA) on Wednesday, local cement sales in January 2022 were 3.4 million tonnes compared to 4.04 million tonnes in January 2021, down 15.87 percent. Exports suffered a massive decline of 20.71 percent as volumes reduced from 694,934 tonnes in January 2021 to 551,006 tons in January 2022.

In January 2022, cement factories based up north sold 2.707 million tonnes in the domestic markets, showing a reduction of 18.29 percent against 3.313 million tonnes in January 2021. South-based units dispatched 693,453 tonnes of cement in local markets during January 2022 that was 4.82 percent less compared to 728,568 tonnes sold in January 2021.

Exports from the north-based units nosedived 94.12 percent, as quantities reduced from 233,404 tonnes in January 2021 to 13,727 tonnes in January 2022. However, the exports from down south increased 16.41 percent to 537,279 tonnes in January 2022 against 461,530 tonnes during the same month last year. During the first seven months of the current fiscal year, total cement dispatches (domestic and exports) were 31.4 million tonnes that calculates to 5.89 percent lower than 33.37 million tonnes dispatched during the corresponding period of the last fiscal year. Further analysis indicated that domestic uptake of the commodity reduced by 0.69 percent to 27.465 million tonnes from 27.657 million tonnes during July-January 2021, whereas exports during the same period declined by 31.04 percent to 3.94 million tonnes from 5.71 million tonnes during July-January 2021.

North-based mills dispatched 22.87 million tonnes of cement domestically during the first seven months of the current fiscal, showing a reduction of 2.85 percent compared to 23.54 million tonnes during July-January 2021. Exports from the north declined by 61.39 percent to 557,615 tonnes during July-January 2022 compared with 1.444 million tonnes exported during the same period last year.

Domestic dispatches by the south-based units during July-January 2022 were 4.59 million tonnes, showing an increase of 11.67 percent over 4.115 million tonnes of cement dispatched during the same period of the last fiscal year. There was however a substantial decline of around 20.78 percent in exports from the south zone, as the volumes reduced to 3.384 million tonnes in the first seven months of the current fiscal year from 4.272 million tonnes in the corresponding period last fiscal.

A spokesman of the APCMA said the decline in cement dispatches was hitting the industry badly, while the industry was already under pressure due to sharp increase in the cost of production that includes international coal prices, high power tariff and transportation cost. He said that slowdown in the construction activities for public sector development projects amid unfavourable weather conditions were some of the major causes of lower cement consumption.

Tokyo Cement commissions Colombo cement terminal

Sri Lanka: Tokyo Cement has commissioned its new 0.45Mt/yr cement terminal at the Port of Colombo in Western Province. The company invested US$12.3m in the facility. It is equipped with three 6000t cement silos. The Daily News newspaper has reported that it will increase the company’s total import capacity to over 1Mt/yr from 0.6Mt/yr. Tokyo Cement says that this will ensure an uninterrupted supply of cement to customers in Western Province.

The cement producer also started work on a 1Mt/yr upgrade project at its Trincomalee plant in November 2021. The work is scheduled for completion in early 2023. Once finished the cement producer will have a total production capacity of 4Mt/yr.

Lucky Cement gets Corporate Excellence Award

KARACHI: Lucky Cement Limited won the Management Association of Pakistan’s Corporate Excellence Award in the cement sector category, a statement said.

Noman Hasan, executive director of the Lucky Cement received the award at the 36th MAP Annual Corporate Excellence Award ceremony.

The Corporate Excellence Awards was instituted by MAP in 1982 with the sole aim to recognise and honour companies, showing outstanding performance and demonstrating progress and enlightened management practices.

Hasan said: “We are pleased to accept this recognition and would like to thank all our internal and external stakeholders for their confidence and continuous support throughout the years.”

He also said: “Our dynamic human capital and efficient corporate governance framework aligned to our vision of ensuring a sustainable leadership position in Pakistan has helped us achieve remarkable results in every domain of our business. Being an industry leader, we are determined to continue setting new benchmarks and create an environment of growth and opportunities.”

Lucky Cement received the award based on having the best corporate practices and governance in the cement sector.

The primary criteria for this award emanates from best corporate and management practices reflected by the leadership, corporate governance, customer and market focus, HR, strategic planning and communication, social responsibility, risk management, IT infrastructure, service delivery and security.

FCCL to become the third-largest player in the country

Fauji Cement Company Ltd (FCCL) informed the Pakistan Stock Exchange (PSX) on 18 November that its Board of Directors has approved the process of amalgamation of Askari Cement Ltd into Fauji Cement Co Ltd and its placement before the shareholders in the Extraordinary General Meeting of the company as Special Business for their approval as per requirements of the Companies Act of 2017.

While commenting on the amalgamation, AHL Research stated that, pertinently, Askari has a cement capacity of 2.8Mta against FCCL’s current capacity of 3.43Mta. This implies an 82 per cent addition to existing capacity, which, together with FCCL’s announced greenfield expansion of 2.05Mta in the north (DG Khan, Punjab) and ACL’s brownfield expansion of 2Mta, will render FCCL to become the third-largest player in the country with a capacity of 10.3Mta.

Post-merger and expansion, ACL will add 47 per cent to the total capacity (4.9Mta out of the total 10.3Mta) in the new entity, whereas its current owners will hold nearly 37 per cent in shareholding (800m shares out of 2180m shares). Albeit, this deal will be beneficial for both ACL and FCCL, as the company’s cumulative market share will aid its augmented presence in North (third largest capacity in the region after Bestway Cement Ltd expands by 2.16Mta to 12Mta and Lucky Cement expands by 3.15Mta to 15Mta).

Iraqi Cement-makers Angry At Fuel Subsidy Cut

Iraq’s association of cement manufacturers on Tuesday slammed a government decision to reduce subsidises on fuel for the sector, warning the move risks factory closures and cement price increases.

The oil ministry earlier this month raised the price of fuel sold to cement manufactures from 150 dinars per litre (around 10 cents) to 250, following on from a previous hike earlier in the year.

The measure caused industry outrage in the crisis-hit country, where some regions are still waiting for costly post-war reconstruction.

“The cement industry is the only one that has been self-sufficient from 2016 until now and hasn’t raised prices,” Ammar al-Saadi, deputy director of the cement manufacturers’ association, told AFP on Tuesday.

He said public and private activity in the sector employed almost 50,000 people directly or indirectly, from factory workers to truck drivers.

The association warned of “enormous losses” in the sector, calling on authorities to reverse the decision.

Cement manufacturers will have to choose between “closures, which would lead to thousands of lay-offs… or an increase in the sale price of cement to at least $10 a tonne,” a statement from the association said.

“That would increase the burden for the population and the state, which is embarking upon the reconstruction of the country and wants to develop infrastructure projects.” The subsidised fuel price for cement manufacturers was originally approved in exchange for their commitment to cap the price of cement.

“The decision will lead to an additional cost of 35 million Euros ($41 million) per year, which could lead to heavy losses for the business,” said Adham al-Sharkawy, head of Lafarge Iraq.

He said the measure could threaten more than a thousand jobs if the firm is unable to pay salaries.

Iraq is the number two oil producer in the Organization of the Petroleum Exporting Countries and almost all of its revenues come from the sector.

Authorities say they want to diversify the economy to reduce their dependence on the sector.