Three Pakistan producers post profits in 1HFY22-23

Three of Pakistan’s cement factories have posted a profit in operation between July and December of FY22-23 (1HFY22-23). However, double-digit inflation, a hike in interest rates and a sharp devaluation of the Pakistani rupee have dampened cement demand. Moreover, low GDP growth, high cost of construction materials and the cut in Public Sector Development Programmes (PSDP) saw cement dispatches decline by 21 per cent YoY in the 1HFY22-23.

Fauji Cement
Fauji Cement Co Ltd (FCCL) earned a profit of PKR5.079bn (US$19.54m) in 1HFY22-23 compared to PKR3.787bn earned in the year’s corresponding period.  This reflects a growth of 34.1 per cent YoY. Its sales increased by 32.9 per cent to PKR33.673bn from PKR25.346bn during the same period last year.  It incurred distribution expenses of PKR266m against PKR270m in the previous financial period. The administrative expenses rose to PKR751m from PKR695m during this period.

Meanwhile, the company’s brownfield cement expansion of 1.95Mta at Nizampur achieved a commercial operation date in October 2022, taking the total capacity of the company (Fauji + Askari) to over 8Mta. It is now the third-largest player in the country.

However, the greenfield expansion at DG Khan Cement (2.05 Mta) is expected to come online by the end of this year. The company’s solar power capacity is now 29MW (8.6MW added at the Wah site) and will increase to 40MW as another 11MW comes online at the Nizampur site.

Cherat Cement
Cherat Cement Co Ltd (CHCC) reported a profit of PKR3.038bn in 1HFY22-23 against PKR2.369bn earned in the corresponding period last year. This reflects a growth of 28.2 per cent YoY. Its sales increased by 31.7 per cent to PKR19.457bn in 1HFY22-23 from PKR14.778bn during the same period last year.  It incurred higher distribution expenses of PKR274m in 1HFY22-23 against PKR242m in the previous financial period. The administrative expenses jumped to PKR208m in 1HFY22-23 from PKR167m when compared with the year-ago period.

Kohat Cement
Kohat Cement Co Ltd (KOHC) has reported a profit after tax of PKR3.739bn in 1HFY22-23 compared to PKR2.984bn earned in the corresponding period last year, up by 25.3 per cent YoY.  The major factor responsible for this increase was the increase in sales, which increased by 32 per cent to PKR19.814bn from PKR15.014bn during this period. It incurred a distribution cost of PKR74m in 1HFY22-23 against PKR52m in the 1HFY21-22. The administrative expenses stood at PKR195m in 1HFY22-23 compared to PKR175m in the year’s corresponding period.