Pakistan’s Pioneer Cement Ltd (PIOC) held its analyst briefing on 26 November 2024 to review its operational and financial performance for FY23-24. IMS Research covered it and stated that PIOC’s earnings per share (EPS) were PKR22.79 (US$0.08), nearly double the amount from the previous year. Higher retention prices and declining fuel and power costs helped offset weak demand and a loss in market share.
The company’s local dispatches reached 2.4Mt, reflecting a decline of 12.7 per cent YoY, compared to a 4.6 per cent decline for the industry overall. This represents a utilisation level of 45 per cent for PIOC.
Outlook
Management anticipates that domestic demand conditions will remain sluggish for FY24-25 and FY25-26, predicting an 8-10 per cent decline YoY in FY24-25.
Looking ahead, management guided future capital expenditures. Over the next seven years, it plans to increase capacity by 7.5Mta. Expansions will commence as local demand improves, starting with a brownfield expansion primarily relying on coal for power requirements. They also indicated that a new 2.5Mta cement plant will cost between US$175m and US$225m.
On some issues, the management said that in Punjab, the royalty on raw materials is PKR1200/t, compared to PKR250/t in Khyber Pakhtunkhwa. Ongoing discussions with the Punjab government aim to address this discrepancy.
According to a quotation from BMA Research, the PIOC’s management is not interested in setting up a solar plant due to the high land cost. Instead, they prefer to invest in coal and WHR plants.
by Abdul Rab Siddiqi, Pakistan
