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Wednesday, August 23rd, 2017

The Bell about – CHCC: 1HFY13 earnings at PKR3.5 – Elixir Securities Limited

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by March 12, 2013 Brokerage

Karachi, March 12, 2013 (PPI-OT): 1HFY13 EPS at PKR3.5; DPS at PKR1.0: Cherat Cement Company (CHCC) announced its 1HFY13 results on February 19, 2013.

According to Elixir Securities Limited the company posted an EPS of PKR6.4, up 5.8x YoY. EPS for 2QFY13 came in at PKR3.5, up 1.2x YoY. Improved margins for the cement sector, owing to favorable cement prices and low coal prices, helped CHCC post stellar growth in earnings in 1HFY13. Elixir Securities Limited expects FY13 EPS to come in at PKR 12.5. The company also announced a cash payout of PKR1.0/share.

CHCC Shares outstanding: 96mn
PKRmn 1HFV12A 1HFY13A VoY 2QFV12A 2QFY13A VoY
Net Sales

2497

3,084

24%

1,329

1,631

23%

Cost of Sales

2080

2,055

-1%

980

1,075

10%

Gross Prof it

417

1,029

141%

349

557

60%

Distribution cost

116

140

21%

69

74

6%

Finance Cost

186

79

-58%

89

32

-63%

Other Operating Exp.

8

45

437%

8

26

239%

Other income

18

11

-37%

9

45

-48%

Prof it before tax

114

777

579%

192

430

124%

Taxation

25

170

585%

36

91

156%

Profit after Taxation

90

607

578%

157

339

116%

EPS (P1(R)

0.94

6.35

576%

1.64

3.54

116%

DPS (PKR)

1.00

1.00

Source: Elixir Research, Company Accounts

High margins add to profitability: Cherat cement was able to post stellar growth in profitability due to the improved margins commanded by the cement producers during 2QFY13. Higher cement prices coupled with the decreasing coal prices helped CHCC to post stellar growth in its gross margin. Gross margin for 1HFY13 clocked in at PKR103/bag as against PKR42/bag (up 1.5x YoY) during the same period last year. Elixir Securities Limited expects CHCC’s gross margin for FY13 to likely come in at PKR95/bag, owing to marginally higher coal prices in 2HFY13.

Strong dividend yield to drive performance: At current levels, CHCC offers FY13 dividend yield

of 10% which shall lure investor interest. Along with dividend yield, the stock offers an upside of

11% to Elixir Securities Limited Dec-13 PT of PKR55/share.

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