Gharibwal Cement achieves a gross profit of PKR1.499bn in 1HFY23-24

Gharibwal Cement Ltd (GWLC) of Pakistan announced its half-year financial results ending 31 December 2023, on 26 February 2024. The company saw a decrease in its profit to PKR685m (US$2.45m) in 1HFY23-24 from PKR1.12bn earned in the same period last year. This translated to a fall of 39.2 per cent in profit YoY. The major factor responsible for this fall was the increased cost of sales and other factors.

According to the company's latest report, it experienced a 1.9 per cent decline in net sales value over the period, primarily driven by reduced sales volume. This decline was compounded by increased production costs, attributed to the devaluation of the Pakistani rupee and elevated fuel, energy and input prices. Furthermore, depreciation expenses surged by PKR183.9m due to a fresh revaluation of fixed assets as of 30 June 2023. Despite these challenges, the company achieved a gross profit of PKR1.499bn for the period under review, compared to PKR2.364bn in the year-ago comparative period.

Capital expenditures
The company is undergoing significant upgrades to enhance operational efficiency and sustainability. A 12MW solar system is currently being installed at its plant, with a letter of credit established for importing solar panels. This initiative, slated for completion by June 2024, is expected to reduce energy costs substantially.

In addition to the solar project, the company is replacing its existing cooler. The main equipment for this cooler retrofit, sourced from supplier FLSmidth, has arrived at the plant. The retrofit of the existing Line I is scheduled for completion by September 2024. Upon completion, the cooler retrofit and preheater modifications will reduce fuel consumption in the kiln and facilitate the utilisation of local, cost-effective coal in a significant portion of the overall coal mix. On the other hand, Balancing, Modernisation and Replacement (BMR) will increase the clinker production capacity of the existing line to 7500tpd.

Gharibwal Cement plant in Jehlum, Punjab, has a cement capacity of 2.11Mta.