Owning 208,833 IRR mn capital, Karoon Cement Company recognized 1,033 IRR EPS for the FY2014 ending March 19, 2015. It is so while this company had recognized 1,423 IRR EPS last year. This company could sell products worth 945 IRR bn which was 14% more than the last year; its products’ final cost grew by 35% and its gross profit dropped by 11%. Karoon Cement Company’s sum of expenses reached 72 IRR bn, showing a 239% raise. In 2014, this company faced a 26% fall in its operating profit and its financial costs decreased by 81% compared to the last year. In fact, the significant increase in its net operating costs led to this negative adjustment.
On Cement Industry, Now and Future
The recession dominating the construction sector has reduced cement domestic usage which alongside the reduction of export demand, based on the lack of construction activities in the target countries’ income fall due to oil price drop, have negatively affected this industry. In the last year, cement production has decreased by 6.2%; its sales amount also shows a 6.1% drop in domestic sales and a 10% fall in export sales. The activists in this industry are demanding for cement price raise due to the employees’ salary raise, the price increase in factors such as fuel and electricity, the consumed materials, etc. Experts believe that continuing to sell cement with the old prices will gradually weaken the cement companies’ financial strength. It is worth remembering that many of the cement companies in the country are old and require renovation. Besides, maintaining the current prices will eventually result in the reduction of cement listed companies’ power and therefore, more reduction of the overall index. However, one of the reasons of this price increase is the problems imposed by sanctions in providing the required parts and equipment of the industries. The cement industry was not an exception and had to purchase the parts from mediators with higher prices in cash. It is clear that sanction relief will exert a direct influence on the reduction of the products’ final cost. Besides, their lifting may also end in the growth of construction projects and cement export improvement and eventually, the improvement of cement companies’ performances in the country.
TSE at a Glance
Summary of Trades
IFB at a Glance
Trading Halts & Delays
As officials have stated, today will be the final day and a decision, whether positive or negative, will be announced. Today, the market was totally bullish and the overall index growth made investors more hopeful of a brighter future. In case of any positive decision, experts believe that capital market players will act cautiously in the first days after the announcement of a positive decision, relying on what happened after Lausanne announcement. At that time, only an announcement had been released and no tangible changes occurred regarding the sanctions. As a result, after a few days of highly emotional behaviors, the market found its relatively rational behavior and things went back to normal. However, this time, if the agreement results in the parties’ commitment and really leads to the relief of sanctions, new capitals and blocked currencies will return to the country and the industries and therefore, the capital market will enjoy a long-term growth and promotion. At this moment, however, investors are waiting for the final result to plan their future moves.
DISCLAIMER: This report has been prepared and issued by Agah Brokerage Firm on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Agah does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice.
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