Analyst:

Muhammad Sarfraz Abbasi

sarfraz.abbasi@atlascapital.com.pk
(+92-21)-111-226-100 (Ext.403)

Morning Pulse Feb 14, 2011

Cement Sector: ACPL - 1HFY11

cement industry was seen struggling for the volumetric
growth as 8.19% decline was posted by local
BUY
dispatches while export dispatches were down by
financial performance review … 11.16% in 1HFY11. However, retention prices remained
Market Snapshot

Synopsis… quite better against last year as per bag prices which KSE 30 11535.33 -246.6 -2.09
Attock Cement Pakistan Limited (ACPL) recently were in the range of PRs260-270 during 1HFY10 were KSE 100 11943.34 -244.13 -2.00
announced its financial results for 1HFY11. The company hovering around PRS330-340 in 1HFY11 which did not let KSE ALL 8296.13 -163.31 -1.93
Pakistan Research

has recorded Profit After Tax (PAT) of PRs235.10m (EPS the top line to see negativity.
PRs2.72), posting a decline of 62% against
corresponding period of the last year when company Raising in put cost changed the game…
had recorded PAT of PRs623.91m and EPS of PRs7.20 The cost of sales of the company jumped up by 21% to Key Data
respectively. In our today’s report we present our PRs3.19bn against 2.64bn 1HFY10. The main reason Market Cap(PRs bn) 4.37
analysis on the performance of the company in 1HFY11 behind this severe increase in cost of sale is none other Shares Outstanding (m) 86.59
than rising energy costs as energy cost which is a major Bloomberg ACPL.PA
and future outlook.
component of total cost of production. In addition to 12M Avg. Volume (m) 0.92
PRs(m) 1HFY10 1HFY11 Y-O-Y this, rising coal prices had a due share in this upsurge.
Revenue 3,731 3,786 1% Floods in Australia have busted coal supplies to the
COGS 2,642 3,196 21% world while demand for coal is on rise which had
pushed up prices to US$130 per ton in December. 160% 12M ACPL relative performance vs KSE
Gross Profit 1,089 590 -46%
ACPLL KSE-100
Operating Cost 309 326 5% Lower operating and financial cost granted 135%

Operating profit 833 310 -63% breathing space…

110%
PBT of the company fell down by 62% in 1HFY11 to
Financial expenses 41 8 -79%
PRs301m against PRs792m during the same period last 85%
Profit Before Tax 792 301 -62% year. Operating cost of the company posted rise of 5%
60%
Taxes 169 66 -61% to PRs326m while other expense of the company also

Mar-10
Jan-10

Feb-10

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Aug-10

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Jan-11
Jul-10
Profit After Tax 624 235 -62% recorded 46% plunge. On the other hand, company’s
EPS (PRs) 7 3 -62% financial charges were seen record down by 79% to
mere PRs8m which enabled company stay its
Gross Margins (%) 29% 16%
profitability.
Operating Margins (%) 22% 8%
Net Margins (%) 17% 6% Recommendation…
Our Target price based on DCF based valuation for the
Source: Company accounts, Atlas Research scrip is PRs69. ACPL currently trading at a discount of Atlas Capital Markets (Pvt.) Ltd
27% to our fair value on scrip. We recommend BUY
Depressed demand an ultimate culprit… stance. B-209, Park Towers, Clifton, Karachi
Top line of the company witnessed skimpy augment of Equity Research: Equity Sales:
1% to PRs3.76bn against 1HFY10 when sales were Tel: 92 (21) 5376125 Tel: 92 (21) 5368261-8
Fax: 92 (21) 5376126 Fax: 92 (21) 5376122
recorded PRs3.73bn. In our view factors that led top line
Money Market: Corporate Finance:
to drop were slow down in dispatches owing to sluggish Tel: 92 (21) 5376128 Tel: 92 (21) 5824991
local and export demand. In comparison of 1HFY10, Fax: 92 (21) 5376129 Fax: 92 (21) 5376122
Financial Products Distribution:
Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time
Tel: 92 (21) 5376125
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.)
Fax: 92 (21) 5376126
Limited accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All
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