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تین چیزیں نیکی کی بنیاد ہیں، تواضع بے توقع, سخاوت بے منت اور خدمت بے طلبِ مکافات
غربت اور افلاس کی وجہ پیداوار کی کمی نہیں، بلکہ اسکی غلط تقسیم ہے
دولت ہونے سے آدمی اپنے آپ کو بھول جاتا ہے اور دولت نہ ہونے سے لوگ اس کو بھول جاتے ہیں
09 February 2018
Ismail Iqbal Securities (Pvt.) Limited
Pioneer Cement Limited (PIOC): PIOC to report EPS of PKR 2.36 for 2QFY18
Pioneer Cement Limited (PIOC) is expected to post earnings of PKR 536.8 million (EPS: PKR 2.36) for 2QFY18, 32.8% lower than the corresponding period last year.
We expect the company’s topline to decline by 5.4% as average cement price in the company’s major markets remained under pressure during 2QFY18.
We expect PIOC’s gross margin to remain low due to higher coal prices during 1QFY18 whose effect is expected to be observed in 2QFY18. Moreover, we expect PIOC’s selling expenses to be substantially higher than the same period last year as provisional cement dispatches data suggest that the company’s total dispatches during the quarter increased by 20% YoY.
Similarly, PIOC’s export dispatches during the quarter remained almost 3 times higher than the corresponding period last year therefore we expect PIOC to report higher selling expenses for 2QFY18. Further, we expect the company to announce an interim dividend PKR 2.15/share.
Pioneer Cement Limited (PIOC): 2Q EPS clocked in at PKR1.4– Below expectations
Wednesday, 21 February 2018
By: Insight Securities (Private) Limited
Pioneer Cement Ltd(PIOC PA) has announced its 2QFY2018 results where the company has posted profit of PKR320m (EPS: PKR1.41), taking 1H FY2018 profit to PKR 737m (EPS: PKR3.25). The result is below our expectation due to lower than anticipated gross margins. Furthermore, the company did not announce any cash dividend as against our expectation of PKR1.25/share.
During 2Q FY2018, net sales of the company declined by 8% in line with the expected decline in dispatches. Similarly, fall in retention prices and increased coal prices (up 8% YoY) pushed the gross margins down by 12pps to 27%.
Higher distribution cost (up 171% YoY), higher other expenses (up 26% YoY) and lower other income (down 92% YoY) also took toll on the earnings which declined by 60% YoY
Pioneer Cement Limited (PIOC): 50%YoY fall registered in 1HFY18 profitability
Wednesday, 21 February 2018
By: Pearl Securities Limited
Pioneer Cement Limited has announced its 1HFY18 profit after tax of PKR737mn (EPS PKR3.25) as against PKR1,502mn (EPS PKR6.61) in the corresponding half of last year, down 51%YoY. The earnings arrived lower than expectation solely due to variance in gross margins. Moreover, the company did not declare any cash dividend as against our expectation of PKR1.25/share.
Top-line exhibited a decline of 6%YoY arriving at PKR4,895mn during 1HFY18 as compared to PKR5,192mn in the same half last year. The plunge in sales revenues can be attributed to lower prices & volumes (down 6%YoY).
Gross profitability of the company arrived at PKR1,477mn versus PKR2,114mn in the same half last year, down 30%YoY. This decline is attributable to higher production cost following increase in coal prices (up 37%YoY) during 1HFY18.
The company posted other income of PKR9mn during 1HFY18 as against PKR106mn in the corresponding half of last year, down by a massive 91%YoY. Moreover, operating expenses have incremented substantially to PKR239mn during 1HFY18 as compared to PKR143mn, up 67%YoY. Probably, PIOC would have booked the loss from NAV adjustment on its mutual fund units under the head of operating expenses, we believe.
Pioneer Cement Limited (PIOC):2QFY18 earnings slashed by 60%YoY to PKR 1.41/share due to reduced margins
Wednesday, 21 February 2018
By: IGI Finex Securities Limited
Pioneer Cement Limited (PIOC) announced its financial results for 2QFY18 with earnings clocking in at PKR 320mn (EPS: PKR 1.41) down by 60%YoY (down by 23%QoQ) as compared to PKR 799mn (EPS: PKR 3.52) in the same period last year. This brings 1HFY18 earnings to PKR 737mn (EPS: PKR 3.25) as against 1HFY17 earnings of PKR 1,502mn (EPS: PKR 6.61), marking a downturn of 51%YoY
Net sales of the Company have declined by 8%YoY to arrive at a level of PKR 2.47bn likely on account of lower dispatches made and trimmed cement sales prices in the northern region.
Gross profit margins of the Company were significantly eroded to 27% as against 39% in the corresponding quarter of preceding year due to lower retention prices accredited to a) falling cement prices in the region; b) rising coal prices globally; and c) imposition of enhanced FED through Finance Act 2017-18.
Pioneer Cement Limited (PIOC): Heavy drop in earning
11 April 2018
Azee Securities (Pvt.) Ltd.
In our today's morning report we would discuss the performance of Pioneer Cement Limited (PIOC) in 1HFY18.
Company reported massive decline in earnings by 51% YoY in 1HFY18 as profit after taxation fall to Rs 737 million (EPS: Rs 3.25) as compared to Rs 1,502 million (EPS: Rs 6.61) in identical period same period. This is primarily due to reduction in domestic selling price, higher global coal prices, surge in distribution cost and lower other income. Similarly, in 2QFY18 company witnessed 23% QoQ fall in earnings to Rs 320 million (EPS: Rs 1.41) in 2QFY18 against PAT of Rs 417 million (EPS: Rs 1.84) in 1QFY18. This is manly due to higher coal prices and lower retention prices.
Net sales of the company decrease by 6% to Rs 4.89 billion in 1HFY18 versus Rs 5.19 billion in 1HFY17 mainly due to lower clinker sales and fall in domestic cement prices. Average cement realized prices down by 3% to Rs 461/bag in 1HFY18. Total cement dispatches were 735k tons, exhibiting a growth of 16.6% as compared to 630k during 1HFY17. However, clinker dispatches dropped to 59k tons, a decline of 70.9% to 202k tons in 1HFY17. The combined effect resulted in the total cement and clinker volumetric sale down by 5% to 794k tons compared to 833k tons accomplished during SPLY.
The board meeting of Pioneer Cement Limited is scheduled on Apr 25th, 2018 to announce its 9MFY18 financial results
We expect the company to post profit after tax of PKR1,076mn (EPS PKR4.74) during 9MFY18 versus PKR2,399mn (EPS PKR10.56) in the corresponding period of last year, depicting a mammoth decline of 55%YoY. This fall is likely due to margin attrition in the backdrop of depressed retention levels coupled with rising production cost.
We anticipate PIOC’s top-line to plunge by 9%YoY to PKR7,342mn in 9MFY18 as compared to PKR8,089mn in the same period of last year. This decline is primarily due to lower dispatches (down 6%YoY) coupled with falling retention levels (down 3%YoY)
We expect gross level margins to arrive at 27% during 9MFY18 as against 41% in the same period of last year, down 14ppsYoY. The significant dip in margins is largely due to lower retention levels (down 3%YoY) and higher production cost (up 20%YoY) amid surging coal prices, up 25% YoY.
Pioneer Cement Limited (PIOC): Higher Coal Price to Snip PIOC’s earnings for 3QFY18
23 April 2018
Ismail Iqbal Securities (Pvt.) Limited
Pioneer Cement Company Limited (PIOC) is scheduled to announce its result for 3QFY18 on April 25, 2018. We expect the company to announce earnings of PKR 303.3 million (EPS: PKR 1.34) reporting a significant decline of 66% YoY. We expect the company’s topline to decline by 13% YoY, whereas we expect cost of sales to increase by 22% YoY as coal price during the quarter increased significantly. Moreover, we expect PIOC’s selling expenses to be substantially higher than the corresponding period last year as provisional cement dispatches data suggests that the company’s total dispatches during the quarter increased by 7% YoY. Similarly, dispatches to cross border destinations were reported at 3.1 times that in the corresponding period last year
During 3QFY18, the average cement price in major markets of the company (Faisalabad, Lahore and Sargodha) slipped to PKR 518/bag from PKR 540/bag in the corresponding period last year. On the other hand, the coal price during the quarter remained 30% YoY higher. Moreover, the Federal Excise Duty (FED) for the quarter was also 25% higher than the corresponding period last year. Hence we expect the company’s gross margin for the quarter to be around 18% as compared to 42% in the SPLY.
Pioneer Cement Limited (PIOC): Higher coal prices to hurt profitability in 3QFY18
24 April 2018
Aba Ali Habib Securities (Private) Limited
PIOC is scheduled to announce its 9MFY18 result on 25th Apr’18. We expect the company to post 3QFY18 EPS of PKR 1.69, down by 57% YoY while EPS for 9MFY18 EPS is likely clock in at PKR 4.93, down by 53% YoY.
We expect revenues to decline by 11% YoY on the back of lower cement prices (off-setting the impact of 8%/4% YoY/QoQ growth in total dispatches). Moreover, we anticipate gross margins to clock in at 26% decline by 15 pps YoY in 3QFY18 on account of increase in international coal prices coupled with currency devaluation which further deteriorate margins.
Furthermore, we expect other income to decline by 81% YoY mainly due to its short term investment parked in equity funding while Finance income is likely to surge by 10.3x on account of increase in long term financing for upcoming expansion.
Pioneer Cement Limited (PIOC): 3QFY18 EPS registers at PKR 1.81, down 54%YoY
25 April 2018
Taurus Securities Limited
Pioneer Cement Limited (PIOC) announced its 3QFY18 result, where the company reported earnings of PKR 412mn (EPS: PKR 1.81) versus PKR 898mn (EPS: PKR 3.95) in SPLY, down by a massive 54%YoY.
This is on the back of a 10%YoY drop in revenue owing to average prices falling by ~5%YoY, and a ~15%YoY uptick in coal prices, ultimately denting gross margins by 19%YoY
On a quarterly basis, sales revenue rose by a meager 5%QoQ as ~6%QoQ rise in dispatches were nearly offset by a ~2%QoQ drop in average selling prices. While, rising coal prices dented gross margins ~4 ppts QoQ.
24 May 2018
Ismail Iqbal Securities (Pvt.) Limited
Pioneer Cement Limited (PIOC) announced earnings of PKR 411.6m (EPS: PKR 1.81) in 3QFY18, reporting a significant decline of 54% YoY, despite an increase in total dispatches. The decline in earnings was mainly because of low cement price during the quarter along with higher coal price. During the quarter, finance cost of the company increased to almost 9 times that reported in the corresponding period last year. Further, the company has booked a negative other expense of PKR 77m in 3QFY18 against a PKR 92m expense in the corresponding period last year.
We have increased our December-18 target price to PKR 79/share from our previous target price of 71/share as we now expect the company to pass on the impact of proposed increase in FED. Our new target price offers an upside of 45%; hence, we are maintaining positive stance on the scrip.
During 3QFY18, PIOC’s total dispatches increased by ~9.5%YoY mainly because of a rise in dispatches to the local market. During the quarter, the company’s dispatches to local market increased by 6% YoY owing to higher demand coming from growth in construction work throughout the country and CPEC related projects.
On the other hand, due to recent devaluation of PKR, company’s cement dispatches to export destinations increased significantly by 3.2 times over the corresponding period last year. However, it has limited impact on overall dispatches as export sales constitute only 5% of total dispatches.
In our today's morning report we would discuss the performance of Pioneer Cement Limited (PIOC).
Primarily owing to higher coal prices and reduced clinker sales, the profit after taxation (PAT) of PIOC fell by 52% YoY in 9MFY18 to Rs 1.14 billion (EPS: Rs 5.06) as against a PAT of Rs 2.39 billion (EPS: Rs 10.56) in 9MFY17. In addition to above mentioned factors; lower cement prices, higher effective taxation, hike in distribution cost, increased finance cost, and lower other income were among the factors due to which the earning of the company observed hefty decline.
Company has notified that it has completed 345 tons per hour cement grinding plant. Now it would become operational from 1QFY19 and will enhance the company's cement utilization level and earnings going forward.
The net revenue of the company fell by 7% YoY in 9MFY18 to Rs 7.50 billion as against Rs 8.08 billion in the identical period in FY17 due to lower clinker sale and decrease in average cement selling prices. The cost of sales on the other side increased by 14% YoY in 9MFY18 to Rs 5.44 billion owing to increase in coal prices in international market coupled with devaluation of Pak Rupee. Therefore gross profit of the company decreased by 38% YoY in 9MFY18 to Rs 2.06 billion as against Rs 3.32 billion in 9MFY17.
Consequently, gross profit margin of the company reduced to 27.5% in 9MFY18 versus 41.1% in 9MFY17. The overall volumetric sales of the company totaled 1,155k tons in 9MFY18 which is 14% YoY up from 1,014k tons in 9MFY17. The local sales grew by 11% to 1,107k tons in 9MFY18 as against 1,001k tons in 9MFY17 on back of growing construction activities by the private sector as well as projects under China Pakistan Economic Corridor (CPEC) and PSDP.
Pioneer Cement Limited (PIOC): Estimates cut but BUY maintained
28 June 2018
Alfa Adhi Securities (Pvt.) Ltd.
We revise down our Price Target (PT) for PIOC by 30% to PKR 74/share driven mainly by the negatives from FY19 budgetary measures, upward revision in coal prices, adverse exchange rate movements and lower expected retention prices. We have also switched from Free Cashflow to Equity (FCFE) to Free Cash flow to Firm (FCFF) based DCF valuation methodology due to a more volatile capital structure during the forecast period. Despite, the downward revision we maintain our ‘BUY’ stance as the stock offers a potential upside of 64% along with dividend yield of 5.6%, implying a total return of 70%.
PIOC’s new grinding mill has commenced and increased its total grinding capacity to 345tph. This will likely allow PIOC to increase its utilization levels (FY15-17 avg: 62%). Due to fast paced progress on 8,000tpd expansion, we have cut the potential delay in expansion from 6 months to 3 months and expect COD by the end of FY19.
Earlier expansion commencement will likely parallel an expected deterioration in demand situation due to worsening macroeconomic situation. While we maintain our industry demand growth estimates, our outlook has turned negative where we now see downside risk (vs upside risks previously) to our forecast. In this backdrop, we have revised our assumptions for PIOC’s market share and expect PIOC to offer discounts in order to park its new capacities.
Pioneer Cement Limited (PIOC): Heavy leverage to restrict upside
29 June 2018
Foundation Securities (Pvt.) Limited
Pioneer Cement (PIOC) is in progress of a major capacity enhancement and improving energy efficiencies. After the aforementioned, the company would have (1) higher market share and (2) lower cement cost/ton. However, the project is capital intensive that would highly leverage its BS, especially at times of ongoing interest rate reversal cycle. Besides, we believe GP margins are likely to remain in pressure. The recent stock correction opens room of entry with our Dec-18 TP of Rs61.0/sh. However, risks of margin and heavy leverage would keep stock in check.
PIOC is installing a Brownfield expansion with capacity of ~2.5mn tons (up 126%) that would surge its capacity based share by 1.5pts to 7% (post expansionary cycle). The project is expected to commission in 2QFY20. The company is also taking efficiency measures by installing 12MW and 24MW WHR and coal captive power plant, respectively. This would lower reliance on expensive grid electricity. The overall project cost is Rs25bn with 25:75 D:E portion. PIOC would have 10% Tax credit under BMR with ~Rs8/sh impact on FY20 earnings.
The expansion is expected to swell company’s cement dispatches mainly by (1) tapping export and (2) penetrating into new markets by expanding dealer network. However on the flip side, within a radius of 200-250km 3 new plants with combined ~7mn tons capacities are coming online in FY20. This may exert pressure on PIOC’s close proximity market. We believe in order to keep new plant run rate at elevated levels, PIOC is likely to access far flung areas that would increase its distribution cost.