Attock Cement Pakistan : Transmission of Quarterly Report

ATTOCK CEMENT PAKISTAN LIMITED

Third Quarter Report

March 31, 2024

Contents

02 03 06

Company Information	Directors' Review	Condensed Interim Statement
		of Financial Position

07 08 09

Condensed Interim Statement	Condensed Interim Statement	Condensed Interim Statement
of Profit or Loss & Other	of Changes in Equity	of Cash Flows
Comprehensive Income

10

Selected notes to and forming part of

the Condensed Interim

Financial Statements

Company Information

Board of Directors

Laith G. Pharaon

Non-Executive Director

Wael G. Pharaon

Non-Executive Director

Shuaib A. Malik

Chairman & Non-Executive Director

Abdus Sattar

Non-Executive Director

Shamim Ahmad Khan

Independent Director

Agha Sher Shah

Independent Director

Mohammad Haroon

Independent Director

Chief Executive

Babar Bashir Nawaz

Alternate Directors

Babar Bashir Nawaz

Irfan Amanullah

Audit Committee of the Board

Shamim Ahmad Khan - Chairman

Shuaib A. Malik

Abdus Sattar

Agha Sher Shah

HR & Remuneration Committee

Agha Sher Shah - Chairman

Shuaib A. Malik

Shamim Ahmad Khan

Mohammad Haroon

Chief Operating Officer &

Company Secretary

Irfan Amanullah

Chief Financial Officer

Muhammad Rehan

Auditors		Bankers
M/s. A.F. Ferguson & Co.	MCB Bank Limited
Chartered Accountants
The Bank of Punjab
Cost Auditors	Allied Bank Limited
Faysal Bank Limited
M/s. UHY Hassan Naeem & Co.	Askari Bank Limited
United Bank Limited
Chartered Accountants
		Habib Bank Limited
Legal Advisor	Bank Al-Habib Limited
Meezan Bank Limited
M/s. HNT & Associates
National Bank of Pakistan Limited
		Dubai Islamic Bank Limited
Registered Office	Habib Metropolitan Bank Limited
D-70,Block-4,Kehkashan-5,	BankIslami Pakistan Limited
Industrial and Commercial Bank
Clifton, Karachi-75600
of China Limited
Tel:	(92-21)35309773-4	Bank Alfalah Limited
UAN:	(92) 111 17 17 17
Fax:	(92-21) 35309775
Email:	[e-mail]

Web site: www.attockcement.com

Plant

Hub Chowki, Lasbela, Balochistan

Share Registrar

M/s. FAMCO Share Registration Services

(Private) Limited

8-F, Near Hotel Faran, Nursery, Block-6,

PECHS, Shahra-e-Faisal, Karachi

Tel: [phone],

(92-21)34384621-3

Fax: [phone]

02

Attock Cement Pakistan Limited

Directors' Review

The Directors are pleased to announce the results of the Company for the period ended March 31, 2024.

OPERATIONAL & FINANCIAL REVIEW

Production and sales figures for the nine months period ended March 31, 2024 are as follows:

Jul-Mar.Jul-Mar.

20242023

--------------- Tons ----------------

Clinker Production

Cement Production

Cement Dispatches - Local

- Export

Cement Dispatches

Clinker Dispatches - Export

Total Dispatches

Clinker Capacity Utilization

Industry Review

1,760,696

1,046,054

948,511

95,568

1,044,079

725,636

1,769,715

81%

1,476,010

1,171,569

1,033,057

134,602

1,167,659

310,936

1,478,595

68%

During the first nine months of current fiscal year, total cement dispatches (domestic and exports) were 34.5 million tons that is 2.7% higher than the same period last year. Domestic dispatches during this period were 29.4 million tons against

30.6 million tons during same period last year, showing decline of 3.9%. Exports rose by healthy 70.0% as the volumes increased to 5.1 million tons during the first nine months of current fiscal year compared to 3.0 million tons during same period of last fiscal year. The overall Industry wide capacity utilization was recorded at 56%.

Sales Review

Local cement sales remained stagnant during the nine months of the year due to uncertain political & economic conditions, higher interest rates and owing to continuous hyper inflationary environment.

The local dispatches in the market of south, where your company is located, reduced by 6% as compared to same period last year and accordingly ACPL's volumetric sales also declined by around 8% during the period under review.

The company was however able to export around 725,636 M tons of clinker quantities which is higher by 133% as compared to same period last year in addition to the cement exports of 95,568 tons. This was mainly due to availability of surplus capacity which led the company to penetrate in the regional markets despite having a lower net retention but still yielding positive contribution margins. As a result the company achieved an overall capacity utilization of around 81%.

Financial Review

The net sales revenue of the company grew by Rs 3.3 billion (18%) over corresponding period. Even though the overall dispatches increased by 20% as compared to same period last year, the overall net retention (both cement & clinker) reduced by Rs 179 per ton (1%) primarily due to higher volumetric share of exports in overall sales volume which increased to around 46% as compared to 30% in same period of last year.

During the period under review, the global coal prices showed some weaknesses which helped the Company in reducing its fuel cost, however, said benefit was completely offset by massive increase in power tariff and other inflationary increases in raw material, transportation and other ancillary costs. As a result, the production cost increased by Rs. 116 per ton (1%) as compared to same period last year.

The continuous increase in production cost was partially passed on to local market consumers by way of price increase and

Third Quarter Report 2024

03

accordingly net retention of cement in local market increased by 11% over the corresponding period. However, the prices in the international market remained under pressure due to stiff competition from other players in the regional markets.

Accordingly the gross margins reduced to 19% from 21%, and operating margins reduced to 6% from 11% as compared to same period last year.

As reported earlier, the company has recognized a sum of Rs. 2,196 million in the financial statement of the 1Q 2023-24 on account of divestment which represents exchange difference, non-competition fee and consideration for loss of majority control as referred in the note 12 of the accounts.

Consequently, the overall net profit after tax has been reported at Rs. 2,219 million.

Commercial Production from Line-IV

By the grace of Almighty Allah, the commercial production from Line - IV has commenced with effect from April 16, 2024. The new line has the total installed cement production capacity of 1,275,000 tons per annum.

Wind Mill project

As part of company's strategy to keep checks on the rising power cost, the company is installing a Wind Mill of 4.8 MW at its plant for captive power generation. An EPC contract has already been signed and letter of credit has been established in March 2024. The project implementation time line is around 10 ~ 12 months.

FUTURE OUTLOOK

Economic instability poses a formidable challenge to country's development and prosperity. The country grapples with a myriad economic issues including sky rocketing inflation, higher interest rates, alarming debt burden and economic growth slowing to meager 2%. Addressing these economic challenges the incumbent government will require comprehensive reforms aimed at improving fiscal management, enhancing revenue generation, promoting exports led growth, speedy privatization of State Owned Enterprises and attracting foreign investments in various segments of the economy.

The country's economic stability is contingent upon its ability to secure the extended new IMF program. The immediate challenge for the new Government will be conclusion of new program as soon as possible so that economic uncertainty is cleared and both the economic managers of the country and Pakistan's corporate sector have the clear idea about the future course of actions.

The consumption led growth is largely dependent upon the interest rates. If the Central Bank continues to observe tight monetary policy then investment in local real estate sector shall remain subdued and as a result the desired level of volumetric growth in cement dispatches may not be achieved.

Your Management is assessing the situation regularly and adopting the measures to keep the rising costs under control through initiating cost saving projects and adopting austerity measures in day to day operations.

ACKNOWLEDGMENT

The Company deeply acknowledges and recognizes the efforts put in by both the management and non-management staff and offers its sincere thanks for their continuous support. The company also recognizes the cooperation that it is constantly receiving from both Federal and Provincial Governments, local administration, law enforcing agencies, regulatory bodies, customers, bankers and suppliers.

On behalf of the Board

BABAR BASHIR NAWAZ	ABDUS SATTAR
Chief Executive	Director
April 25, 2024
Rawalpindi

04

Attock Cement Pakistan Limited

CONDENSED INTERIM FINANCIAL STATEMENTS

Condensed Interim Statement of Financial Position

As at March 31, 2024

Note

ASSETS

Non-current assets

Unaudited	Audited
March 31,	June 30,
2024	2023
----------------(Rupees in '000)	----------------------

Fixed assets - property, plant and equipment	5
Long-term investments
Long-term loans and advances - considered good
Long-term deposits
Current assets
Inventories	6
Trade receivables - considered good
Loans and advances - considered good
Short-term deposits and prepayments
Other receivables
Taxation - payments less provisions
Short-term investment
Cash and bank balances
Investment held for sale - divestment	7
Total assets
EQUITY AND LIABILITIES
Share capital and reserves
Share capital - issued, subscribed and paid up
Unappropriated profit
LIABILITIES
Non-current liabilities
Long-term loans
Deferred Income - Government grant
Lease libilities
Deferred tax liabilities
Employee benefit obligations
Current liabilities
Trade and other payables	8
Consideration received against divestment of subsidiary
Unpaid dividend

Unclaimed dividend

Accrued mark-up

Sales tax payable

Short-term borrowings

Current portion of lease libilities

Total liabilities

33,323,857

63,753

43,252

99,940

33,530,802

6,051,864

1,115,017

176,165

346,965

766,505

898,759

800,000

551,781

10,707,056

3,297,762

47,535,620

1,374,270

19,946,827

21,321,097

5,425,029

1,440,228

22,413

3,586,983

36,220

10,510,873

7,551,855

-

310,545

11,265

409,914

-

7,395,201

24,870

15,703,650

26,214,523

31,068,301

57,348

53,008

99,940

31,278,597

3,815,145

1,387,948

106,128

92,333

617,885

1,726,400

1,804,815

1,015,016

10,565,670

1,823,001

43,667,268

1,374,270

17,594,244

18,968,514

6,435,527

1,198,287

16,875

2,760,946

60,631

10,472,266

6,976,903

3,359,948

-

11,275

145,589

2,040

3,708,653

22,080

14,226,488

24,698,754

Contingencies and commitments	9
Total equity and liabilities	47,535,620	43,667,268

The annexed notes 1 to 17 form an integral part of these condensed interim financial statements.

Muhammad Rehan	Babar Bashir Nawaz	Abdus Sattar
Chief Financial Officer	Chief Executive	Director

06

Attock Cement Pakistan Limited

Condensed Interim Statement of Profit or Loss and other Comprehensive Income

For the nine months period ended March 31, 2024 - Unaudited

	Quarter ended			Nine months ended
	March 31,	March 31,			March 31,	March 31,
2024	2023	2024	2023
Note -----------------------------------------------------	(Rupees in '000)---------------------------------------------------

Revenue from contracts with customers	10	7,055,593
Cost of sales		(5,779,236)
Gross Profit		1,276,357
Distribution costs	11	(700,791)
Administrative expenses		(196,413)
Other expenses		(33,000)
Other income		55,619
Profit from operations		401,772
Gain on disposal of subsidiary	12	-
Finance cost		(95,586)
Share of net income of associate accounted		-
for using the equity method
Profit before income tax		306,186
Income tax expense		(128,000)
Profit for the period		178,186
Other comprehensive income
Unrealised gain on disposal	13		-
Related deferred tax			-
			-
Total comprehensive income		178,186
Basic and diluted earnings per share (Rupees)		1.30

8,016,572

(6,298,618)

1,717,954

(670,953)

(176,630)

(52,999)

3,032

820,404

-

(93,090)

-

727,314

(230,000)

497,314

-

-

-

497,314

3.62

21,693,836

(17,629,569)

4,064,267

(2,117,226)

(599,440)

(129,656)

138,945

1,356,890

2,196,744

(185,713)

6,404

3,374,325

(1,155,693)

2,218,632

2,134,558

(832,478)

1,302,080

3,520,712

16.14

18,389,718

(14,557,883)

3,831,835

(1,313,711)

(535,223)

(122,936)

152,728

2,012,693

-

(307,284)

3,951

1,709,360

(651,869)

1,057,491

-

-

-

1,057,491

7.69

The annexed notes 1 to 17 form an integral part of these condensed interim financial statements.

Muhammad Rehan	Babar Bashir Nawaz	Abdus Sattar
Chief Financial Officer	Chief Executive	Director

Third Quarter Report 2024

07

Condensed Interim Statement of Changes in Equity

For the nine months period ended March 31, 2024 - Unaudited

	Share capital	Unappropriated	Total
	profit
	---------------------------	(Rupees in '000) -----------------------------
Balance as at July 1, 2022	1,374,270	16,117,268	17,491,538
Final dividend for the year ended	-	(206,140)	(206,140)
June 30, 2022 @ Rs. 1.50 per share

Total comprehensive income for the year ended June 30, 2023

Profit for the year ended June 30, 2023

Other comprehensive income for the year ended June 30, 2023

Total comprehensive income for the year ended June 30, 2023

Balance as at June 30, 2023

Final dividend for the year ended June 30, 2023 @ Rs. 6.0 per share

Interim dividend for the year ending June 30, 2024 @ Rs. 2.50 per share

Total comprehensive income for the nine months period ended March 31, 2024

Profit for the nine months period ended March 31, 2024

Other comprehensive income

-

-

-

1,374,270

-

-

-

-

-

1,516,062

167,054

1,683,116

17,594,244

(824,562)

(343,567)

2,218,632

1,302,080

3,520,712

1,516,062

167,054

1,683,116

18,968,514

(824,562)

(343,567)

2,218,632

1,302,080

3,520,712

Balance as at March 31, 2024

1,374,270

19,946,827

21,321,097

The annexed notes 1 to 17 form an integral part of these condensed interim financial statements.

Muhammad Rehan	Babar Bashir Nawaz	Abdus Sattar
Chief Financial Officer	Chief Executive	Director

08

Attock Cement Pakistan Limited