Karachi: Pakistan's listed cement sector has reported a significant rise in profits for the first quarter of the fiscal year 2027, registering a 19% year-on-year increase and an 11% rise from the previous quarter, according to a recent press release by JS Global. The surge in profitability is attributed to higher sales and other income, with net sales climbing 18% year-on-year and 14% quarter-on-quarter, reaching Rs219.8 billion.

According to JS Global, the cement sector's growth in the first quarter was driven by an 8% year-on-year increase in domestic dispatches, which amounted to 10.85 million tons, despite an 11% decline in export volumes. The average price per cement bag rose in both the northern and southern regions of the country, contributing to an improved capacity utilization rate of 62.16%, up from 58.10% in the same period last year.

The press release highlights that gross margins improved to 31.26% from 29.46% year-on-year, although they slightly decreased from the previous quarter. This improvement was supported by increased cement prices and lower coal inventory costs. Notably, Richards Bay coal prices saw a 26% year-on-year increase.

The sector also reported a 14% year-on-year and 45% quarter-on-quarter increase in other income, primarily driven by higher dividend income from Lucky Cement. However, the finance cost rose by 42% year-on-year, largely due to a significant loan taken by one of the companies in the sector.

Among individual companies, Lucky Cement stood out as the largest contributor, with its earnings rising 17% year-on-year and 73% quarter-on-quarter. Bestway Cement and Fauji Cement also contributed significantly to the sector's earnings, while some companies, such as MLCF and Gharibwal Cement, reported declines in profitability.

The report concludes by noting that Lucky Cement, Bestway Cement, and Fauji Cement collectively contributed 66% to the sector's earnings for the quarter.