KOHC Reports 4QFY24 EPS of Rs12.17, Announces Share Buyback

Staff Report:

Kohat Cement (KOHC) announced its 4QFY24 results , reporting earnings of Rs2.38bn (EPS of Rs12.17), reflecting a 420% year-on-year (YoY) increase.

The result exceeded expectations for 4QFY24, mainly due to higher-than-expected other income and improved gross margins.

In addition, the company announced a share buyback of up to 12 million shares, which constitutes 6.13% of the total outstanding shares.

Other income for 4QFY24 rose by 76% YoY to Rs1.31bn, driven primarily by an increase in income from financial assets.

The company recorded gross margins of 32% in 4QFY24, compared to 30% in 3QFY24 and 27% in 4QFY23. The improved margins were attributed to higher domestic retention prices and a more cost-efficient coal mix.

Net revenue decreased by 5% YoY but increased by 2% quarter-on-quarter (QoQ) to Rs8.67bn in 4QFY24. The YoY revenue decline was due to lower dispatches, while the QoQ increase was driven by higher domestic retention prices.

It is worth noting that domestic dispatches for KOHC fell by 15% YoY and remained flat QoQ at 0.56 million tons. Export dispatches dropped by 66% YoY but grew by 11% QoQ to 0.01 million tons.

The effective tax rate in 4QFY24 stood at 37%, compared to 34% in 3QFY24 and 83% in 4QFY23. The higher tax rate in 4QFY23 was due to the imposition of super tax liability.

For FY24, KOHC’s earnings increased by 53% YoY to Rs8.89bn. This growth was primarily driven by higher other income and improved gross margins.

Other income for FY24 rose by 114% YoY to Rs4.45bn, mainly due to increased income from financial assets, as a result of higher investments and interest rates.

Gross margins in FY24 stood at 29%, compared to 27% in FY23. The improved margins were due to higher domestic retention prices and lower coal costs.