Pioneer Cement’s profits shrink by 47% in FY21-22

Pioneer Cement Ltd earned a net profit after tax of PKR1.05bn (US$4.83m) in FY21-22 (July 2021-June 2022) compared to PKR1.97bn in the same period the previous year. This translates to a decrease in profit by 47 per cent YoY.  

The company, in its annual report, pointed out that its net sales during the reporting period increased by 46.1 per cent to PKR31.87bn from PKR21.81bn during the same period in the previous year. Despite the topline growth, increased input costs, higher interest rates and introduction of a 10 per cent super tax, all combined have taken a toll on the bottom line, which shrunk by 47 per cent. 

Pioneer Cement dispatched 3.88Mt of cement against 3.38Mt in the previous year. It has an installed cement capacity of 5.194Mta in Punjab. The company incurred a slightly higher distribution cost of PKR119m against PKR118m in the same period last year. The administrative expenses increased to PKR134m from PKR128m during this period. The company paid a hefty tax of PKR2.89bn against PKR228m in the last fiscal year. Finance cost for the year under review amounted to PKR2.656bn compared to PKR1.817bn in the previous year. 

Aly Khan, company chairman, stated that Pioneer Cement sets a strategic direction to focus on cost effective production through procurement of local and Afghanistan coal, self-generation of power through our 48MW of internal WHR and coal capacity, exploration of solar generation and course capacity expansion. 

Outlook on the industry level
With the unprecedented monsoon season and the recent devastating floods in Pakistan, the cement industry is in a state of flux. Several factors are causing changes in the industry and it is difficult to predict the future. The factors affecting the cement industry are the increasing cost of raw materials, limited government spending, increased national grid tariff and upward revisions in policy rates.