FLYNG's plant has a single kiln with an installed capacity of 4,000 tonnes per day of clinker using dry process technology, while the rated capacity of cement is 1.26 million tonnes per annum. Commercial production of cement began in January 2005. The Ishikawajima-Harima Heavy Industries Company Limited, Japan (IHI) had initially set up and then re-engineered FLYNG's plant. IHI is the supplier and technical advisor of FLYNG and is involved with manufacturing and facilitating in space development, jet engines and storage systems and process plants.
FLYNG also provides the facility of transporting cement to markets and sales depots, for which it has a fleet of 8 (18 wheeler) trucks for delivery across various parts of the country. The company is part of the Flying Group of Industries (FGI), founded in 1971. FGI has diversified interests in manufacturing activities such as photo copy paper, writing/printing paper, coated duplex board, sack kraft paper and tissue paper besides dry Portland cement.
FLYNG is mainly involved in the manufacture of Ordinary Portland Cement (OPC 42.5N) cement. The company complies with Pakistan, British, American (American Society for Testing and Materials), European and Indian standards and also holds cement quality certifications from the Cement Research and Development Institute, Pakistan and Societe Generale De Surveillance, Switzerland. The Board of FLYNG comprises of eight members with Kamran Khan as the Chairman. Agha Humayun Khan serves as the CEO of the company.
FINANCIAL PERFORMANCE Q3 FY14 During the third quarter of FY14, FLYNG's performance improved in terms of volumes owing to better production management and marketing of cement. Higher production and sales led to a profit after tax of Rs 3.79 million during the quarter compared with an after-tax loss of Rs 36.54 million during the corresponding period of the previous year.
The company's financials have also improved remarkably compared with last year. Sales increased by a whopping 258 percent during the nine-month period, leading to a gross profit of Rs 35.32 million against a loss of Rs 121 million during the corresponding period of the previous year. The third quarter also witnessed an increase of 189 percent in sales compared with the corresponding period of the previous year.
Operating expenses, including distribution and administrative costs, cumulatively increased by 28.61 percent during the nine-month period. However, the increase was more pronounced during the third quarter with operating expenses growing by 67.5 percent compared with the corresponding period of the previous year. On the other hand, finance costs came down by 11.68 percent and 6.14 percent during the nine-month period and the third quarter, respectively.
Operating profit turned positive this year, amounting Rs 3.29 million compared with a loss of 153 million during 9M FY13. For the third quarter, operating profit stood at Rs 5.74 million compared with a loss of Rs 75 million during the corresponding period of the previous year. The company has also benefited from over Rs 22 million in other income this year, while taxation figures came down by 91 percent during the nine-month period compared with the corresponding period of last year. The company's net margins and EPS rose by an impressive 132 percent during the nine-month period and by 109 percent during the third quarter of FY14.
FUTURE OUTLOOK While the company has shown impressive recovery during the year, FLYNG's performance has also benefited from an environment that has been favourable for the cement and construction sector whereby local cement despatches in the country increased by 2.5 percent. Despite a fall in cement exports, local demand remained high on account of mega projects both in the public and private spheres. Volumes for cement players are likely to remain dependent on a number of government-led mega projects and realisation of PSDP allocations towards infrastructure development in the country.
==========================================================================
FLYNG key financials
==========================================================================
Nine months ended Quarter ended
==========================================================================
Rs (mn) Mar-14 Mar-13 Mar-14 Mar-13
==========================================================================
Sales 1,565.83 437.21 539.87 186.88
Cost of sales (1,530.50) (559.07) (525.49) (255.57)
Gross profit/(loss) 35.33 (121.86) 14.38 (68.69)
Operating expenses
Distribution cost (3.79) (3.10) (0.44) (0.39)
Administrative expenses (8.03) (6.08) (1.52) (0.77)
(11.81) (9.19) (1.96) (1.17)
Operating profit/(loss) 23.51 (131.05) 12.42 (69.86)
Finance cost (20.22) (22.90) (6.68) (7.12)
Operating profit/(loss) 3.29 (153.94) 5.74 (76.98)
Other income 22.15 - - -
Profit/(loss) before taxation 25.44 (153.94) 5.74 (76.98)
Taxation 6.25 67.35 (1.96) 40.43
Profit/(loss) after taxation 31.69 (86.60) 3.79 (36.55)
EPS-basic (Rs) 0.18 (0.49) 0.02 (0.21)
==========================================================================
Source: Company reports