Analyst:

Muhammad Sarfraz Abbasi

sarfraz.abbasi@atlascapital.com.pk
(+92-21)-111-226-100 (Ext.403)
Morning Pulse Nov 22, 2010

volumetric sales by posting a growth of 3.48% to 0.41m

Cement: ACPL – 1Q/FY11 financial tons in 1Q/FY11 against 0.40m tons in 1Q/FY10.
performance review… However, top line of the company witnessed a scanty Market Snapshot
decline of 2.90% to PRs1.75bn against sales of PRs1.81bn Index Chg %
Synopsis… in 1Q/FY11. Plunge in revenue was mainly because of KSE 30 10596.46 65.45 .62
Attock Cement Pakistan Limited (ACPL) has announced KSE 100 10966.00 56.35 0.52
low retention prices in both export and local markets.
its operating results for 1Q/FY11 recently. The company KSE ALL 7628.24 38.44 0.51
This decline in revenue was found comparatively lower
Pakistan Research

has recorded Profit After Tax (PAT) of PRs96.87m

than other established brands. Industry big boys, LUCK
translating into an EPS of PRs1.12, posting a decline of
and DGKC sales experienced a fall of 8% and 23%
58.91% against last year when company had recorded
respectively.
PAT of PRs235.75m and EPS of PRs2.72 respectively..
Key Data
(PRs m) 1Q/FY10 1Q/FY11 Chg Operating performance – Still all right… Market Cap(PRs bn) 5.37
Volumetric sales (Tons) 398 412 3% During the period under review, operating expenses of Shares Outstanding (m) 86.59
the company witnessed an increase of 14.94% to Bloomberg ACPL.PA
Turnover 1,807 1,755 -3%
PRs142.73m as against 1Q/FY10 when these were 12M Avg. Volume (m) 0.11
Cost of Sales 1,340 1,502 12%
recorded at PRs124.17m. On the other hand, other
Gross Profit 467 253 -46%
charges recorded a decline of 57.63% Y-o-Y to
Operationg costs 124 143 15% PRs11.68m against PRs27.50m in 1Q/FY10 which added
Finance Charges 24 4 -85% weight to the bottom-line. In addition to this, financial
12M ACPL Relative Performance
140%

Profit Before Taxation 345 139 -60% charges in 1Q/FY11 witnessed gigantic decline of
120%
Taxation 110 43 -61% 85.17% to PRs3.61m against PRs24.37m in 1Q/FY10. This
Profit After Taxation 236 97 -59% plunge in financial charges which makes company 100%

EPS (Rs) 2.72 1.12 -59%

quite attractive is mainly because of the “no debt” in 80%
ACPL KSE-100

balance sheet. As we believe being liquid the 60%

Gross Margins (%) 26% 14%
company has potential to offer greater dividends.

Apr-10

Aug-10
Feb-10

Oct-10
Nov-09

Dec-09

Jan-10

Jun-10

Sep-10

Nov-10
Mar-10

May-10

Jul-10
Operating Margins (%) 19% 6%
Future Outlook…
Net Margins (%) 13% 6%
We are positive on cement sector. We believe industry
Source: company accounts, Atlas research has seen a tough time and have touched the bottom.
Depressed volumetric sales a real problem… Retention prices have increased we believe still there is
In 1Q/FY11, volumetric sales of majority of the cement ample space for the prices to go further upward.
players witnessed decline. The reason behind this Volumetric sales are also expected to pick up the pace
dwindle in volumetric sales is nothing other than the by 2H/FY11 as the domestic and export demand is likely
demand which normally remains sluggish during the first to see the rise by then. As an indicator, Latest data
released by APCMA reveals that the local and export
Atlas Capital Markets (Pvt.) Ltd
quarters. However, the impact which was seen this year
dispatches have increase by 43.22% and 51.72% B-209, Park Towers, Clifton, Karachi
was slightly greater than the yesteryears as this year
several factors beside horrible floods kept the demand respectively on M-o-M basis. Total industry dispatches Equity Research: Equity Sales:
Tel: 92 (21) 5376125 Tel: 92 (21) 5368261-8
on the knees. Fall of Ramadan, Eid holidays, law and have shown growth of 45.87% M-o-M basis. Even these
Fax: 92 (21) 5376126 Fax: 92 (21) 5376122
order situation were main challenges. Nevertheless, numbers are showing rising demand trends,
Money Market: Corporate Finance:
ACPL has shown a great deal of improvement in term of nevertheless, we anticipate dispatches to see further Tel: 92 (21) 5376128 Tel: 92 (21) 5824991
growth in 2H/FY11. Fax: 92 (21) 5376129 Fax: 92 (21) 5376122

Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time Financial Products Distribution:
of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Atlas Capital Markets (Pvt.) Tel: 92 (21) 5376125
Limited accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All Fax: 92 (21) 5376126
information is provided without warranty and Atlas Capital Markets (Pvt.) Limited makes no representation of warranty of any kind as to the accuracy or Atlas Research is available on Bloomberg and
completeness of any information hereto contained. Thomson Financial