Pakistan’s leading cement producers are projected to report significant profits for the last quarter (April-June) of FY25, with AKD Research estimating a 42 per cent YoY growth in profitability.
The AKD Cement Universe’s earnings are expected to rise by 32 per cent YoY in 4QFY24-25E, reaching PKR19.9bn, driven by higher retention prices and decreasing finance costs amid lower interest rates. Average domestic cement prices are likely to increase by 17 per cent, and total offtakes by two per cent, enhancing the overall top-line by seven per cent YoY.
Gross margins are expected to improve to 34 per cent due to factors such as lower coal prices and grid electricity rates. While companies like Fauji Cement, Maple Leaf Cement Factory, and Pioneer Cement Ltd may see a contraction in gross margins due to rising royalty rates, their offtakes have increased, partially offsetting this decline. DG Khan Cement Co Ltd is expected to recover significantly, reporting earnings of PKR1.9bn (US$6.68m) compared to a loss last year, aided by improved gross margins. Conversely, Lucky Cement Ltd’s earnings may decline by 34 per cent YoY to PKR4.2 per share due to missing dividends from Lucky Electric Power Co Ltd (LEPCL).
Overall, the outlook remains positive, backed by expected demand growth and margin expansion, with Fauji Cement Co Ltd and Kohat Cement Co Ltd as preferred investments in the sector.
The AKD Cement Universe encompasses Lucky Cement Ltd, DG Khan Cement Co Ltd, Fauji Cement Co Ltd, Maple Leaf Cement Factory Ltd, Cherat Cement Co Ltd, Kohat Cement Co Ltd, and Pioneer Cement Ltd.
by Abdul Rab Siddiqi, Pakistan
