Kohat Cement Limited (KOHC) witnessed decent growth in profitability as company posted earning of Rs 683 million (EPS: Rs 4.42) in 1QFY15 against Rs 616 million (EPS:Rs 3.99) in 1QFY14, depicting rise by 11%. Surge in earning mainly attributed to better retention prices, hike in other income and reduction in financing cost. However, earnings drop by 6% QoQ to Rs 683 million (EPS: Rs 4.42) against Rs 726 million (EPS: Rs 4.70) during 4QFY14 mainly due to lower volumetric sales, decline in other income and surge in effective taxation of 27.2% in 1QFY15 versus 21.7% in 4QFY14.

Higher volume propel revenue
Net sales of the company surge by 11% to Rs 2.92 billion in 1QFY15 compared to Rs2.64 billion owing to higher volumetric sales and 5% rise in retention prices. Volumetric sales surge by 5.3% to 431k tons in 1QFY15 against 409k tons witnessed in 1QFY14. Local dispatches went up by 13% to 358k tons in 1QFY15 versus 317k tons in  1QFY14 due to better construction activities. While export down 21% to 73k tons in 1QFY15 compared to 92k tons in 1QFY14 due to lower demand in Afghanistan.

Gross profit up by 3%
Cost of sales increase by 15.3% to Rs 1,887 million versus Rs 1,636 billion in 1QFY14 due to due to increase in electricity charges by around 50%. Thus gross profit showed marginal growth of 3.1% to Rs 1,038 million versus Rs 1,007 million in 1QFY14. Gross margin decreased to 35.5% from 38.1% in 1QFY14. Retention prices up by 5% to Rs 6,814/ton versus Rs 6,502/ton in 1QFY14.


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