The Pakistan cement industry has yet to post its financial results for the third quarter of FY24-25 at the Pakistan Stock Exchange (PSX). However, Topline Pakistan Research forecasts that its profitability will likely rise by 40 per cent YoY in the 3QFY24-25, driven by lower finance costs and increased sales.

The Topline Cement Universe, which includes several leading cement firms, is expected to report profitability of PKR16bn (US$57m) in the 3QF24-25, a 40 per cent increase YoY, compared to a profit of PKR11.4bn in the 3QFY23-24, mainly due to lower finance costs and higher sales.

Net sales are projected to grow by 10 per cent YoY to PKR93.7bn in the 3QFY24-25, primarily because of higher domestic retention prices and greater total dispatches. Due to reduced interest rates, finance costs in the 3QFY24-25 will likely fall by 44 per cent YoY to PKR2.8bn.

According to APCMA data, the cement sector’s capacity utilisation stood at 54 per cent in the 3QFY24-25, compared to 52 per cent in the 3QFY23-24 and 61 per cent in the 2QFY24-25.

In the 3QFY24-25 cement players in the south region depended on Richards Bay coal, while those in the north region utilised a mix of Afghan and local coal. Average prices for Richards Bay coal were US$96/t in the 3QFY24-25, compared to US$97/t in the 3QFY23-24 and US$110/t in 2QFY24-25, reflecting a one per cent YoY decline and a 13 per cent QoQ decrease.

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The average retention price for 3QFY24-25 is estimated at PKR813/bag, a three per cent increase YoY but a four per cent decrease QoQ. The sector’s other income is estimated at PKR6.4bn in the 3QFY24-25, representing an 18 per cent YoY rise yet a 17 per cent QoQ decline. Lucky Cement is expected to account for 55 per cent of the sector’s other income.

The Topline Cement Universe includes Lucky Cement , Maple Leaf Cement, Fauji Cement Co Ltd, Kohat Cement and DG Khan Cement (DGKC).

by Abdul Rab Siddiqi, Pakistan