Top cement companies in Pakistan will begin releasing their financial results for the last quarter (April-June 2024) on the Pakistan Stock Exchange (PSX) website. The Topline Cement Universe, which includes Lucky Cement, Kohat Cement, Fauji Cement, DG Khan, and Maple Leaf Cement, is expected to post profitability of PKR12.5bn (US$44.9m) in the 4QFY23-24 against a profit of PKR11.1bn in the 3QFY23-24, up by 13 per cent QoQ due to higher average retention prices. This will take FY23-24 profit to PKR51.1bn, up 84 per cent YoY due to an increase in gross profit margins.

Topline Cement Universe posted a YoY loss of PKR2.8bn in the 4QFY22-23 due to a higher effective tax rate related to super tax liability. Excluding tax implications, profit before tax (PBT) in the 4QFY23-24 is expected to increase by 45 per cent YoY due to higher revenues and other income.

Net sales are anticipated to grow 10 per cent YoY to PKR91.3bn in the 4QFY23-24 despite a seven per cent YoY decline in local cement sales, thanks to an 11 per cent YoY increase in average local cement prices. The decline in cement dispatches in the 4QFY23-24 is due to:
• lower working days amid the Eid holidays
• the high cost of constructionLower demand due to the economic slowdown
• the cement sector’s capacity utilisation was 52 per cent in the 4QFY23-24, compared to 55 per cent in the 4QFY22-23.

The sector’s gross margin is anticipated to improve by one per cent YoY to 27 per cent in the 4QFY23-24 due to higher retention prices.

During the 4QFY23-24, cement players in the south region mostly relied on Richards Bay coal, while those in the north region used a combination of Afghan and local coal. Richards Bay coal prices averaged US$108/t in the 4QFY23-24, compared to US$109/t in the 4QFY22-23 and US$97/t in the 3QFY23-24, down one per cent YoY and up 11 per cent QoQ.

The average retention price for the 4QFY23-24 is estimated at PKR914/bag, up 11 per cent YoY and two per cent QoQ. The sector’s other income was estimated to be PKR5.6bn in the 4QFY23-24, up 44 per cent from the previous year.