Bestway Cement has announced its financial results for the half-year period (Jul-Dec) of FY 2019-20
Bestway Cement Limited (BWCL)’s profits dropped massively to just Rs. 421.11 million during the half-year, decreasing by almost 94% as compared to Rs. 6.88 billion recorded in the same period last year.
The sales of the company were reported at Rs. 19.87 billion, down by 28.30% as compared to Rs. 27.70 billion in the previous year.
The decline in the company’s profitability was due to declining volumes as there were low cement demand and lower selling prices due to fierce competition and increasing costs.
The cost of sales of the company remained flat as they were reported at Rs. 18.50 billion as compared to Rs. 18.60 billion. Lower sales and stagnant costs of sales have led the company’s gross profits to decline significantly by 85% to just Rs. 1.37 billion from Rs. 9.10 billion. In addition, higher fuel and energy prices during the period also made a dent on the company’s gross profits.
Cement companies have been expanding in the country, which has resulted in price competition as the market is small. Selling and distribution expenses went down by 43.60% to Rs. 447 million as compared to Rs. 793 million in the same period last year whereas administrative and other expenses decreased by 30% and 98.30% respectively.
Financial charges stood at Rs. 1.01 billion for the half-year under review, up by 46.45% versus Rs.692.93 million recorded in the same period last year. This increase was driven by a persistent upward trend in interest rates.
Earnings per share of the company decreased to just Rs. 0.7 from Rs. 11.54. At the time of filing this report, BWCL’s shares at the bourse were trading at Rs. 97.50, down by Rs. 6.50 or 6.25%, with a turnover of 28,700 shares on Thursday.