Power Cement : Transmission of Quarterly Report for the Period Ended March 31, 2023

Our Cemented Commitment to Progress:

Forging a Sustainable Future

				ENDED
			2024
	MONTHS
MARCH	31,
NINE

Table of

Contents

Company Information	02
Directors' Review	03
Condensed Interim Statement of Financial Position	06
Condensed Interim Statement of Profit or Loss and other Comprehensive Income (Unaudited)	08
Condensed Interim Statement of Changes in Equity (Unaudited)	09
Condensed Interim Statement of Cash Flows (Unaudited)	10
Notes to the Condensed Interim Financial Statements (Unaudited)	11

Company

Information

Board of Directors		Chairman, Non-Executive Director
Mr. Nasim Beg
Mr. Muhammad Kashif Habib		Chief Executive Officer
Mr. Samad A. Habib		Non-Executive Director
Syed Salman Rashid		Non-Executive Director
Mr. Anders Paludan-Mϋller		Non-Executive Director
Mr. Javed Kureishi		Independent Director
Mr. Khursheed Anwer Jamal		Independent Director
Ms. Zainab Kashif		Non-Executive Director
Audit Committee		Chairman
Mr. Khursheed Anwer Jamal
Syed Salman Rashid		Member
Mr. Samad A. Habib		Member
Human Resource & Remuneration Committee		Chairman
Mr. Javed Kureishi
Syed Salman Rashid		Member
Mr. Muhammad Kashif Habib		Member
Chief Financial Officer	Foreign Banks / DFIs
Muhammad Taha Hamdani	DEG - Deutsche Investitionsund
	Entwicklungsgesellschaft mbH - Germany
Company Secretary
The OPEC Fund for International Development
Mr. Salman Gogan	("OFID") - Austria
	Islamic Corporation for the Development
External Auditors
of the Private Sector ("ICD") - Saudi Arabia
A.F. Ferguson & Co. Chartered Accountants
Registered Office
Legal Advisor
Arif Habib Centre, 23, M.T. Khan Road, Karachi
Mr. Asad Iftikhar
Factory
Share Registrar
Nooriabad Industrial Area, Deh Kalo, Kohar,
CDC Share Services Limited	District Jamshoro, Sindh
CDC House, 99-B,Block-B, SMCHS,
Website
Main Shahrah-e-Faisal, Karachi - 74400
	www.powercement.com.pk
Bankers / Lenders of the Company
Contact Number
Local Banks / DFIs
Allied Bank Limited	021-32468231-2
Al Baraka Bank (Pakistan) Limited	021-32468350-1
Askari Bank Limited
Fax Number
Bank Alfalah Limited
Bank Al Habib Limited	021-32463209
Bank Islami Pakistan Limited
Dubai Islamic Bank (Pakistan) Limited
Faysal Bank Limited
First Credit & Investment Bank Limited
Habib Bank Limited
Habib Metropolitan Bank Limited
National Bank of Pakistan
Pak Oman Investment Company Limited
The Bank of Punjab
The Bank of Khyber
Bank Makramah Limited
Samba Bank Limited
United Bank Limited

NINE MONTHS ENDED MARCH 31, 2024 02

DIRECTORS' REVIEW

The Board of Directors of your Company present herewith their review on the financial and operational performance of the Company for the nine months period ended March 31, 2024.

ECONOMIC OVERVIEW

Amidst economic challenges, Pakistan demonstrated resilience and progress in the fiscal year. Despite inflation and currency depreciation, the country achieved modest growth. Furthermore, the GDP growth of Pakistan is projected at 2% in 2024 and 2.3% in 2025 according to the United Nations 'Economic and Social Survey of Asia and the Pacific 2024'. Notably, inflation dropped to 23.1% in February 2024, with projections indicating further decreases. Measures such as maintaining policy rate to 22% have helped to manage inflationary pressures. Despite challenges like raw material shortages and high input costs, the nation's resolve remained firm. Additionally, the Pakistan Stock Exchange experienced a remarkable 60% surge in FY-2024, showcasing Pakistan's ability to navigate global uncertainties and seize opportunities.

INDUSTRY OVERVIEW

During the reporting period, the cement industry witnessed notable developments, with total despatches reaching 34.50 million tons, reflecting a 2.69% increase compared to the corresponding period. Notably, domestic sales experienced a slight decline of 3.8%, while exports exhibited significant growth, expanding by 68%.

In the South Zone, domestic sales faced a moderate downturn of 6.34%, with despatches reaching 5.16 million tons, compared to 5.51 million tons in the corresponding period. Conversely, export sales within the region exhibited robust growth, escalating by 80% to reach 4 million tons, in contrast to the 2.25 million tons reported during the corresponding period.

In the North Zone, domestic sales faced a moderate downturn of 3.24%, with despatches reaching 24.2 million tons, compared to 25 million tons in the corresponding period. Conversely, export sales within the region exhibited robust growth, escalating by 33.62% to reach 1 million tons, in contrast to the 0.7 million tons reported during the corresponding period.

PRODUCTION & SALES PERFORMANCE

The production and sales statistics of the Company for the nine months ended March 31, 2024 together with the corresponding period are as under:

		Nine Months Ended
Production	March 31		March 31	Variance %
2024	2023
		In Tons
Clinker production	1,822,924		1,626,976	12%
Cement production	1,299,530		1,529,002	(15%)

The overall capacity utilization for the nine months stood at 76% as compared to 68% in the corresponding period.

		Nine Months Ended
Sales Volume	March 31		March 31	Variance %
	2024	2023
		In Tons
Cement/ Clinker dispatches (Local)	1,048,454		1,239,106	(15%)
Cement dispatches (Export)	280,586		392,238	(28%)
Clinker dispatches (Export)	727,085		195,151	273%
Total	2,056,125		1,826,495

03 Power Cement Limited

DIRECTORS' REVIEW

FINANCIAL PERFORMANCE

An analysis of the key financial results of your Company for the nine months ended March 31, 2024 is as under:

Particulars	Nine Months Ended	Quarter Ended
March 31		March 31	March 31	March 31
	2024	2023	2024	2023
		Rs. ' 000'	Rs. ' 000'
Net Sales Revenue	24,939,287		21,513,126	8,091,953	8,870,180
Gross Profit	5,459,050		4,833,498	1,503,361	2,081,961
Operating Profit	2,642,042		2,674,919	708,716	1,076,984
Finance Cost	(3,882,134)		(2,795,251)	(1,346,341)	(1,004,486)
(Loss) / Profit Before Tax	(1,240,092)		(120,332)	(637,625)	72,498
(Loss) / Profit After Tax	(1,186,911)		553,427	(717,094)	133,133

Sales revenue for Power Cement Limited reached Rs. 24.94 billion, marking a 16% increase compared to the same period last year. The Company's gross profit increased to Rs. 5.46 billion, reflecting approximately 13% growth compared to FY-2023. However, higher financial costs led to a loss after tax of Rs. 1.18 billion during the nine months of FY-2024.

FUTURE OUTLOOK

Looking ahead, Pakistan's economy anticipates growth, supported by declining commodity prices and flexible import policies. Challenges such as dwindling reserves, high interest rates, and inflation persist, requiring a cautious approach. With recent elections concluded, hopes for political stability are high. The IMF's staff-level agreement on the final review under the Stand-By Arrangement will provide access to US$1.1 billion, bolstering market confidence.

The future outlook of the construction sector in Pakistan is expected to be challenging, with slow growth anticipated due to ongoing economic constraints, high inflation, and political instability, which may impact investment and demand for construction projects, despite potential opportunities in infrastructure development and housing. Efforts to enhance operational efficiency are crucial for financial stability. Our commitment is to optimize efficiency and implement cost rationalization measures, aligning strategies with the evolving economic landscape for sustained growth and stability.

ACKNOWLEDGEMENT

The Directors of your Company take pleasure in expressing their sincere gratitude and appreciation for commitment and contribution of all the employees and the continued trust and reliance placed in the Company by all the stakeholders.

For and on behalf of Board of Directors

Muhammad Kashif Habib	Nasim Beg
Chief Executive Officer	Chairman

April 30, 2024

Karachi

NINE MONTHS ENDED MARCH 31, 2024 04

Financial Statements

FOR THE PERIOD ENDED MARCH 31, 2024

Condensed Interim Statement of Financial Position

AS AT MARCH 31, 2024

	Note
ASSETS
Non-current assets
Property, plant and equipment	5
Right-of-use asset
Long-term investments
Deferred tax asset
Long-term deposits

(Unaudited) March 31,

20242023

(Rupees in '000)

34,295,225 34,853,984

3,091 12,362

32,621 26,873

3,949,519 3,649,907

53,667 63,359

38,334,123 38,606,485

Current assets	6
Inventories
Stores, spares and loose tools	7
Trade receivables - considered good	8
Advances and other receivables

• unsecured, considered good Taxation - payments less provision Derivative financial asset
  Trade deposits and short-term prepayments Tax refunds due from government - sales tax Short-term investments

Cash and bank balances

9

TOTAL ASSETS

1,992,474

4,189,038

706,618

885,479

276,282

2,218,785

167,698

1,053,094

26,399

636,414

12,152,281

50,486,404

2,593,218

1,636,761

276,087

584,575

122,617

3,509,149

102,852

662,657

26,399

409,823

9,924,138

48,530,623

Chief Financial Officer

Chief Executive Officer

Director

NINE MONTHS ENDED MARCH 31, 2024 06

Condensed Interim Statement of Financial Position

AS AT MARCH 31, 2024

	Note
EQUITY AND LIABILITIES
Share Capital and Reserves
Share capital	10

(Unaudited) March 31,

202432023

(Rupees in '000)

Ordinary shares
Cumulative preference shares
Reserves
Capital Reserve
Share premium
Difference on conversion of cumulative preference
shares into ordinary shares
Revenue Reserve
Hedging reserve
Accumulated loss
Contribution from associated undertakings
LIABILITIES
Non-current liabilities
Long-term financing - secured
Long-term trade payables
Staff retirement benefits
Current liabilities
Trade and other payables
Unclaimed dividend
Accrued mark-up
Short-term financing - secured
Current portion of long-term lease liability
Current portion of long-term financing
TOTAL LIABILITIES
Contingencies and commitments	11

11,118,838

2,082,333

13,201,171

739,493

(121,174)

39,113

(4,563,683)

(3,906,251)

11,700,000

20,994,920

14,927,260

346,356

199,617

15,473,233

5,117,222

126

1,238,633

6,270,220

2,517

1,389,533

14,018,251

29,491,484

11,118,705

2,082,433

13,201,138

739,493

(121,141)

125,309

(3,376,772)

(2,633,111)

7,000,000

17,568,027

17,328,806

470,634

170,307

17,969,747

4,527,395

126

1,923,466

5,012,000

17,326

1,512,536

12,992,849

30,962,596

TOTAL EQUITY AND LIABILITIES

50,486,404 48,530,623

The annexed notes from 1 to 18 form an integral part of these condensed interim financial statements.

Chief Financial Officer

Chief Executive Officer

Director

07 Power Cement Limited

Condensed Interim

Statement of Profit or Loss and

Other Comprehensive Income - Unaudited

FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2024

	Nine months period ended		Quarter ended
Note	March 31,	March 31,	March 31,	March 31,
2024		2023		2024		2023

----------------------------------(Rupees in '000)----------------------------------

Revenue from contracts with customers 12

Cost of sales

Gross profit

Selling and distribution expenses

13

Administrative expenses

Other (expense) / income

Profit from operations

Finance income

Finance cost

(Loss) / profit before taxation

Taxation

(Loss) / profit after taxation

Other comprehensive income / (loss)

Items that are or may be reclassified subsequently to profit or loss

Cash flow hedge - effective portion of changes in fair value net of deferred tax

Adjustment for amounts transferred to profit or loss

Total comprehensive (loss) / income for the period

24,939,287

(19,480,237)

5,459,050

(2,313,922)

(328,420)

(174,666)

(2,817,008)

2,642,042

21,082

(3,903,216)

(3,882,134)

(1,240,092)

53,181

(1,186,911)

(953,192)

953,192

-

(1,186,911)

21,513,126

(16,679,628)

4,833,498

(1,149,252)

(274,004)

(735,323)

(2,158,579)

2,674,919

13,528

(2,808,779)

(2,795,251)

(120,332)

673,759

553,427

1,325,218

(1,325,218)

-

553,427

8,091,953

(6,588,592)

1,503,361

(819,947)

(109,733)

135,035

(794,645)

708,716

9,345

(1,355,686)

(1,346,341)

(637,625)

(79,469)

(717,094)

(368,168)

368,168

-

(717,094)

8,870,180

(6,788,219)

2,081,961

(544,159)

(100,208)

(360,610)

(1,004,977)

1,076,984

8,627

(1,013,113)

(1,004,486)

72,498

60,635

133,133

1,055,676

(1,055,676)

-

133,133

	----------------------------------------		(Rupees)----------------------------------------
Basic earnings / (loss) per share	14	(1.41)	0.26		(0.77)	0.03

The annexed notes from 1 to 18 form an integral part of these condensed interim financial statements.

Chief Financial Officer	Chief Executive Officer	Director	08
		NINE MONTHS ENDED MARCH 31, 2024

Condensed Interim

Statement Of Changes In Equity - Unaudited

FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2024

			Difference on		Capital		Revenue Reserve		from		Total
						Reserve
		capital		preference		Share		Hedging			associated
					loss
				shares into
				shares
	-----------------------------------------------------					(Rupees in '000)	-----------------------------------------------------
Balance as at July 1, 2022	13,201,138	(121,141)	739,493				(3,536,035)	7,000,000	17,283,455
Total comprehensive income / (loss) for the period
Profit for the period	-	-	-	-		553,427	-	553,427
Balance as at March 31, 2023
13,201,138		(121,141)		739,493		-		(2,982,608)		7,000,000		17,836,882
Balance as at July 1, 2023	13,201,138	(121,141)	739,493	125,309		(3,376,772)	7,000,000	17,568,027
Contribution received	-	-	-	-			4,700,000	4,700,000
Difference on conversion of
Cumulative Preference Shares	33	(33)	-	-		-	-	-

Total comprehensive income / (loss) for the period

Loss for the period		-		-		-
Other comprehensive income / (loss) for
the period		-		-		-
	33		(33)		-
Balance as at March 31, 2024
	13,201,171		(121,174)		739,493

-		(1,186,911)		-		(1,186,911)
(86,196)		-		-		(86,196)
(86,196)		(1,186,911)		4,700,000		3,426,893
39,113		(4,563,683)		11,700,000		20,994,920

The annexed notes from 1 to 18 form an integral part of these condensed interim financial statements.

Chief Financial Officer

Chief Executive Officer

Director

09 Power Cement Limited