Page 57 - CCL AR 2017 Final

Quarterly Results Analysis

Quarter 1
• Turnover decreased mainly due to monsoon rains and holy month of Ramadan. Net dispatches were the
lowest of all quarters of financial year 2016-17 but cement export was the highest.
• Cost of production per ton of cement reduced due to reduced coal & oil prices and cost efficiency measures
taken by the Company which enabled it to post 39.34% gross profit as compared to 29.75% gross profit of 1st
Quarter of 2015-16.

• Operating and net profit rose to the margin of 31.6% and 22.8% respectively as compared to the 1st Quarter
of 2015-16 mainly due to increase in gross profit margin.

Quarter 2
• Cement demand boosted due to launch of various mega projects by the government and increase of private
sector spending on construction activities resulting in increased turnover as compared to the 1st Quarter.
• Low coal and furnace oil prices along with efficient power management enabled the Company to post
42.38% gross profit as compared to 39.34% gross profit of the 1st Quarter of 2016-17.
• Operating and net profit increased to the margin of 35.4% and 26.9% respectively, mainly due to increase in
gross profit margin.

Quarter 3

• Production activities of Line II started in January 2017 and increase cement demand led to increase in turnover
as compared to previous quarters.

• Inflated fuel prices and deprecation pertaining to Line II became the main reason for increase in cost of
production which affected the gross profit margin.
• Net profit margin decreased mainly due to high production cost along with finance cost pertaining to newly
commissioned Line II.

Quarter 4

• Turnover was the highest in this quarter mainly due to increase in cement demand.
• Increased fuel and power cost along with depreciation expense ofLine II adversely affected gross profit margin
which remained at the lowest as compared to previous quarters for the financial year 2016-17.
• Net profit margin also remained low due to decrease in gross profit margin and increase in finance cost.

Analysis of Variation in Interim Results with Final Accounts
During the first and second quarter fuel and power prices remained on the lower side which led to gross profit
margin of 39.34% and 42.38% respectively. In January 2017 Line II has successfully commissioned which led the
production activities of the Company. On the other hand inflated fuel and power cost upset the profit margins of
the Company jointly with the heavy depreciation and other operational cost of Line II that have been capitalized
earlier. The Company export also remained low due to disturbance on Pak Afghan border during the year.
However, this effect was nullified due to significant increase in local cement demand; resulting in a 49% increase
in total dispatches during the year.

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Annual
Report 2017