EPS figures calculated from Net Profit / 637,560,000 shares outstanding.
UCC share price as of 28 Jul 2008 was 4.88 dhs, so 2008 estimated PE is about 4.88 / 0.24 = 20.3, based on Q2 earnings, which is higher than the market average PE of about 14 but at least it's an improvement on the much higher PE of 37 for 08Q1.
2008 PE estimate based on H1 earnings is 4.88 / 0.18 = 27.0, which makes shares look more expensive, due to the effect of the poor earnings in Q1 this year.
So compared to last year, UCC profits are looking grim, but last year Q2 was an exceptional one with AED 96m Net Profit for the quarter, helped by a good quarter in the stock markets. The 08Q2 profits are actually the best seen for the past 6 quarters, excluding 07Q2.
Nevertheless, red flags still pop up for significantly increased Cost of Sales eating into the good growth in Sales Revenue. UCC say that it's due to increased raw material and energy costs but don't say what they plan to do to alleviate the problem.
Management report from Union Cement (UCC) undated but presumably is similar to results date. Auditor report and balance sheet were dated 22 July 2008 but not released until today. It looks like UCC shares haven't traded since then - last date I have is 23 July 2008 when shares fell 2.2% to AED 4.88.
Union Cement July 2008:
Management Report for the Second quarter 2008.
1) Financial Result
The total sales revenue up to end of the Second quarter was AED514.9 million compared to AED273.2 mill. same period last year 2007 which is 88% higher than last year.
The Company's net profit up to end of the Second quarter 2008 was AED 57.6 mill. compared to AED 118.3 mill. same period last year.
The decrease of the net profit is due to high cost of raw materials, heavy fuel oil and increase cost of power generation due to shortage of supply from FEWA and shortage of gas supply, which lead to use diesel & leasing power gernerators to cover the shortage of power supply, and decrease profit in share investment.
Basic earning per share at the end of the Second quarter was AED 0.09 compared to AED 0.18 same period last year 2007.
The company's asset increased (property, plant & equipment) to AED 955 mill. compared to AED 910 mill. last year 2007.
The share holder equity decreased to AED 1,336 mill. compared to AED 1.372 mill. last year 2007. Due to cash dividend paid to shareholders.
Union Cement posts 60% fall in Q2 profit
by Jason Benham
Union Cement Co (UCC) posted a 60.2 percent drop in net profit in the second quarter on high raw material and fuel costs, as well as a sharp decline in income from investments in shares.
Net profit in the three months ended June 30 fell to 38.22 million dirhams ($10.41 million) from 96.06 million dirhams in the same period last year, below two analysts' forecasts in a survey last month.
Earnings per share for the second quarter fell to 0.06 dirhams from 0.15 dirhams, the UAE's third-largest producer by market value said in a statement on the Abu Dhabi bourse website.
Income from investments in shares plunged 95.1 percent to 2.01 million dirhams, the Ras al-Khaimah-based firm said.
"The decrease in net profit is due to the high cost of raw materials, heavy fuel oil and the increase in cost of power generation due to the shortage of supply ... and the shortage of gas supply," the statement said.
Union Cement used diesel and leased power generators to compensate for the power supply shortage, it said. Other income dropped 79.9 percent to 610,000 dirhams, it added, without giving details.
Financing costs soared to 1.22 million dirhams from 48,000 dirhams.
Last month, the cement firm said it was considering using coal to fire one of its kilns instead of natural gas or heavy fuel.
Cement makers in the United Arab Emirates are turning to imported coal as gas is scarce and a petrodollar-fuelled building boom shows no signs of letting up.
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