Pakistan producers expect mixed results in 1QFY24-25

Pakistan Stock Exchange (PSX) listed cement firms have yet to start posting their financial results for 1QFY24-25. However, Topline Pakistan Research believes that its Cement Universe (comprising Lucky Cement, Kohat Cement, DG Khan Cement, Maple Leaf Cement and Fauji Cement Co Ltd – the country's top five cement producers) is expected to post profitability of PKR13.3bn in the first quarter of FY24-25 against a profit of PKRs12.9bn in the 4QFY23-24, up by three per cent QoQ, mainly due to lower financial charges. In addition, on a QoQ basis, higher retention prices have mitigated the impact of lower domestic dispatches and higher coal costs, especially in the north (Khyber Pakhtunkhwa).

YoY, Topline Cement Universe profitability is expected to decline by six per cent, mainly due to lower domestic dispatches, which were down by 20 per cent YoY to 8.13Mt in 1QFY24-25.Net sales are anticipated to decline by three per cent YoY to PKR91.5bn in the 1QFY24-25, mainly due to lower domestic dispatches, although higher export sales have mitigated the full impact. The decline in cement dispatches in the 1QFY24-25 is due to higher QoQ bag prices andstrikes by dealers in response to taxation measures taken in the FY24-25 budget.

During the 1QFY25, cement players in the southern region relied on Richards Bay coal, while those in the north used a combination of Afghan and local coal. Richards Bay coal prices averaged US$110t in 1QFY25, compared to US$108/t in the 4QFY24 and US$113t in the 1QFY24, down by one per cent YoY and up by two per cent QoQ.

The average retention price for 1QFY24-25 is estimated at PKR930/bag, up 12 per cent YoY and two per cent QoQ.

by Abdul Siddiqui, Pakistan