The stock price of Attock Cement Pakistan Limited (ACPL) has shed more than 22 per cent since January 2011, underperforming the Benchmark KSE-100 Index by 26.2 per cent during the same period. This grim performance was mainly on account of a 52 per cent annual decline in profitability during 9MFY11.
Diminishing brand premium and higher energy costs were major loss factors for the company. It is believed these negative factors are being overplayed on the market as the stock price plunged to an 18 month-low during yesterday’s trading but ended the day at Rs49.96 per share said Syed Abid Ali at AHL. ACPL has made a strong comeback on dispatches front during April-May 2011 by achieving 344,000 tonnes in sales.
At this pace, the company is likely to achieve 7.4 per cent quarterly growth in the fourth quarter of FY11. This coupled with a four per cent improvement in the ex-factory price is likely to yield a massive growth of 60 per cent in the profitability to Rs3.51/share in 4QFY11 taking full year earning per share to Rs8.42. ACPL is expected to bring its 12MW Waste Heat Recovery Plant (WHRP) online in September 2011, which is likely to reduce electricity purchases from KESC by 41.7 per cent, with an annualised impact of Rs 4.1 per share. Based on 300 working days, its WHRP will have the capacity to generate 86.4 million KWh against a total annual requirement of 208 million KWh.
