Dewan Cement Ltd of Pakistan reported a loss of PKR252m (US$0.905m) for the first quarter of FY24-25 (ended on 30 September), compared to PKR115.958m in September 2023. According to the quarterly report, cement dispatches declined to 312,215t for the quarter ending 30 September 2024, down from 404,419t in the same period last year.
The company’s directors noted that sales volume fell by 23 per cent compared to last year’s corresponding period. However, an 11 per cent increase in retention due to a price hike helped offset this decline, resulting in a 15 per cent change in overall value. The rise in production costs is mainly attributed to fluctuations in electricity expenses, stemming from adjustments in both fixed and variable electricity rates and the impacts of inflation. Collectively, these factors have led to a modest increase in production expenses.
Additionally, the company has initiated energy conservation measures by installing solar systems at both plants, which contribute to renewable energy and help reduce power costs.
Dewan Cement’s current liabilities now exceed its current assets by PKR2.898bn, slightly improved from PKR2.905bn in June 2024.
Outlook
Although there has been a temporary decrease, the potential for growth through enhanced export sales and possible cost efficiencies in the forthcoming quarters may lead to increased sales and reduced expenses. Consumers and investors wait for the economy to stabilise before making large purchases. This uncertainty can hinder transactions, as seen in real estate demand. Local cement demand is expected to rebound in FY24-25, driven by improved fiscal conditions, easing inflationary pressures, and falling interest rates.
by Abdul Ram Siddiqi, Pakistan
