Premier Cement posts 8 times higher profit in Q3 of FY21
Greater sales and lesser taxes account for the massive profits
KEY FINANCIALS
- Revenue was Tk958.15 crore in July 2020 to Mar 2021 period
- Net profit stood at Tk43.14 crore
- EPS grew 3 times YoY to Tk4.07
- Share price at the DSE rose 4.25% to Tk63.8 each on Sunday
Premier Cement Mills Ltd posted eight times net profit growth to Tk16.6 crore in the third (January to March) quarter of the current fiscal year, compared to the same quarter of the previous fiscal.
The company's earnings per share (EPS) was Tk1.56 in the quarter, which was Tk0.18 in the same period previous year, thanks to growth in company sales and a reduction in the minimum tax, from 5% to 3%, on the import value of raw materials.
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The cement industry as a whole started feeling the heat from the added 5% minimum tax since July 2019.
Following a plea by cement manufacturers to remove the minimum tax, the non-refundable advance income tax (AIT) was reduced to 3%, which was effective from 1 January 2020.
In the last fiscal, the coronavirus pandemic dragged down the cement business for which the overall sector suffered.
But in this fiscal, Premier Cement posted a 14% growth in revenue to Tk363.38 crore in the January to March quarter.
Mohammed Amirul Haque, managing director of Premier Cement, told The Business Standard, "We have had such business growth because people spent more to build homes, and the government also continued to build infrastructure."
"But now the country is facing the second wave of the coronavirus which is likely to hit business in the next quarter," he added.
At the end of the first three quarters of this fiscal, Premier Cement's revenue stood at Tk958.15 crore and net profit was Tk43.14 crore. During this period, its EPS was Tk4.07.
Riding on positive growth, Premier Cement's share price rose by 4.25% to Tk63.80 a share at the Dhaka Stock Exchange on Sunday.
In the last fiscal, it paid a 10% cash dividend to shareholders.
LafargeHolcim, one of Premier's competitors, posted 23% sales and 98% profit growth, to Tk631.8 crore and Tk103.5 crore respectively, during the January to March 2021 period.
Another competitor, Heidelberg Cement also witnessed nine times higher year-on-year growth in net profit, to Tk46.51 crore in the first quarter of this year. During this period, its revenue also grew by 44% to Tk550.58 crore.
