Pakistan: Cherat Cement profit rises by 52%

Pakistan cement producer, Cherat Cement, has announced its 1HFY17 (July-December 2016) financial result. It reported a profit after tax (PAT) of PKR1025m (US$9.75m) during 1HFY17 against a PAT of PKR676m during 1HFY16, up 52 per cent YoY.

According to a research report by Al Habib Capital Market, during 1HFY17, Cherat Cement reported a 17 per cent YoY growth in its top‐line attributable to rising dispatches, which were up 21 per cent YoY. The rise in dispatched stemmed from increased domestic dispatches, which saw a  30 per cent YoY growth. This 30 per cent increase has been partly attributed to an acceleration in private sector construction activities and commencement of work on mega projects.

However, there was a nine per cent YoY drop in export dispatches during 1HFY17 due to shrinking demand from Afghanistan and increased competition from Iranian cement.

Cherat Cement’s gross profit margins remained positive due to a fall in international coal prices amid weaker global demand resulting in lower fuel costs.

Finance costs dropped by 15 per cent YoY while other income rose by 175 per cent YoY during 1HFY17 due to available funds following the near completion of expansion projects.

In addition, Cherat Cement informed the Pakistan Stock Exchange that the Board of Directors has decided to acquire the third cement production line from Tianjin Cement Industry Designing and Research Institute Company Ltd.

The plant will have a production capacity of over 7100tpd and is expected to be commissioned in 27 months' time at its existing site in Nowshera, Khyber-Pakhtunkhwa. The total cost of the project is approximately PKR13.5bn.